[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 428 Introduced in Senate (IS)]
109th CONGRESS
1st Session
S. 428
To provide $30,000,000,000 in new transportation infrastructure funding
in addition to TEA-21 levels through bonding to empower States and
local governments to complete significant long-term capital improvement
projects for highways, public transportation systems, and rail systems,
and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 17, 2005
Mr. Talent (for himself, Mr. Wyden, Mr. Allen, Mr. Coleman, Ms.
Collins, Mr. Corzine, Mr. Dayton, Mrs. Dole, Mr. Graham, and Mr.
Vitter) introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To provide $30,000,000,000 in new transportation infrastructure funding
in addition to TEA-21 levels through bonding to empower States and
local governments to complete significant long-term capital improvement
projects for highways, public transportation systems, and rail systems,
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; ETC.
(a) Short Title.--This Act may be cited as the ``Build America
Bonds Act of 2005''.
(b) References to Internal Revenue Code of 1986.--Except as
otherwise expressly provided, whenever in this Act an amendment or
repeal is expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered to be
made to a section or other provision of the Internal Revenue Code of
1986.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--Congress finds the following:
(1) Our Nation's highways, public transportation systems,
and rail systems drive our economy, enabling all industries to
achieve growth and productivity that makes America strong and
prosperous.
(2) The establishment, maintenance, and improvement of the
national transportation network is a national priority, for
economic, environmental, energy, security, and other reasons.
(3) The ability to move people and goods is critical to
maintaining State, metropolitan, rural, and local economies.
(4) The construction of infrastructure requires the skills
of numerous occupations, including those in the contracting,
engineering, planning and design, materials supply,
manufacturing, distribution, and safety industries.
(5) Investing in transportation infrastructure creates
long-term capital assets for the Nation that will help the
United States address its enormous infrastructure needs and
improve its economic productivity.
(6) Investment in transportation infrastructure creates
jobs and spurs economic activity to put people back to work and
stimulate the economy.
(7) Every billion dollars in transportation investment has
the potential to create up to 47,500 jobs.
(8) Every dollar invested in the Nation's transportation
infrastructure yields at least $5.70 in economic benefits
because of reduced delays, improved safety, and reduced vehicle
operating costs.
(9) The proposed increases to the Transportation Equity Act
for the 21st Century (TEA-21) will not be sufficient to
compensate for the Nation's transportation infrastructure
deficit.
(b) Purpose.--The purpose of this Act is to provide financing for
long-term infrastructure capital investments that are not currently
being met by existing transportation and infrastructure investment
programs, including mega-projects, projects of national significance,
multistate transportation corridors, intermodal transportation
facilities, and transportation and security improvements to highways,
public transportation systems, and rail systems.
SEC. 3. CREDIT TO HOLDERS OF BUILD AMERICA BONDS.
(a) In General.--Part IV of subchapter A of chapter 1 (relating to
credits against tax) is amended by adding at the end the following new
subpart:
``Subpart H--Nonrefundable Credit for Holders of Build America Bonds
``Sec. 54. Credit to holders of Build America bonds.
``SEC. 54. CREDIT TO HOLDERS OF BUILD AMERICA BONDS.
``(a) Allowance of Credit.--In the case of a taxpayer who holds a
Build America 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 Build America 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 Build America 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
(2), 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 sale of the issue) on outstanding long-term corporate
debt obligations (determined in such manner as the Secretary
prescribes).
``(4) Credit allowance date.--For purposes of this section,
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.
``(5) 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 this
part (other than this subpart and subpart C).
``(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) 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.
``(e) Build America Bond.--For purposes of this part, the term
`Build America bond' means any bond issued as part of an issue if--
``(1) the net spendable proceeds from the sale of such
issue are to be used--
``(A) for expenditures incurred after the date of
the enactment of this section for any qualified
project, or
``(B) for deposit in the Build America Trust
Account for repayment of Build America bonds at
maturity,
``(2) the bond is issued by the Transportation Finance
Corporation, is in registered form, and meets the Build America
bond limitation requirements under subsection (g),
``(3) the Transportation Finance Corporation certifies that
it meets the State contribution requirement of subsection (k)
with respect to such project, as in effect on the date of
issuance,
``(4) the Transportation Finance Corporation certifies that
the State in which an approved qualified project is located
meets the requirement described in subsection (l),
``(5) except for bonds issued in accordance with subsection
(g)(6), the term of each bond which is part of such issue does
not exceed 30 years,
``(6) the payment of principal with respect to such bond is
the obligation of the Transportation Finance Corporation, and
``(7) with respect to bonds described in paragraph (1)(A),
the issue meets the requirements of subsection (h) (relating to
arbitrage).
``(f) Qualified Project.--For purposes of this section--
``(1) In general.--The term `qualified project' means any--
``(A) qualified highway project, and
``(B) qualified public transportation project,
proposed by 1 or more States and approved by the Transportation
Finance Corporation.
``(2) Qualified highway project.--
``(A) In general.--The term `qualified highway
project' means any--
``(i) project of regional or national
significance,
``(ii) multistate corridor program,
``(iii) border planning, operations,
technology, and capacity improvement program,
and
``(iv) freight intermodal connector
project.
``(B) Projects of regional and national
significance.--
``(i) In general.--The term `project of
regional or national significance' means the
eligible project costs of any surface
transportation project which is eligible for
Federal assistance under title 23, United
States Code, including any freight rail project
and activity eligible under such title, if such
eligible project costs are reasonably
anticipated to equal or exceed the lesser of--
``(I) $100,000,000, or
``(II) 50 percent of the amount of
Federal highway assistance funds
apportioned for the most recently
completed fiscal year to the State in
which the project is located.
``(ii) Eligible project costs.--The term
`eligible project costs' means the costs of--
``(I) development phase activities,
including planning, feasibility
analysis, revenue forecasting,
environmental review, preliminary
engineering and design work, and other
preconstruction activities, and
``(II) construction,
reconstruction, rehabilitation, and
acquisition of real property (including
land related to the project and
improvements to land), environmental
mitigation, construction contingencies,
acquisition of equipment, and
operational improvements.
``(iii) Criteria for approval.--The
Transportation Finance Corporation may approve
a project of regional or national significance
only if the Corporation determines that the
project is based on the results of preliminary
engineering, and is justified based on the
project's ability--
``(I) to generate national or
regional economic benefits, including
creating jobs, expanding business
opportunities, and impacting the gross
domestic product,
``(II) to reduce congestion,
including impacts in the State, region,
and Nation,
``(III) to improve transportation
safety, including reducing
transportation accidents, injuries, and
fatalities, and
``(IV) to otherwise enhance the
national transportation system.
``(C) Multistate corridor program.--
``(i) In general.--The term `multistate
corridor program' means any program for
multistate highway and multimodal planning
studies and construction.
``(ii) Criteria for approval.--The
Transportation Finance Corporation shall
consider in approving any multistate corridor
program--
``(I) the existence and
significance of signed and binding
multijurisdictional agreements,
``(II) prospects for early
completion of the program, or
``(III) whether the projects under
such program to be studied or
constructed are located on corridors
identified by section 1105(c) of the
Intermodal Surface Transportation
Efficiency Act of 1991 (Public Law 102-
240; 105 Stat. 2032).
``(D) Border planning, operations, technology, and
capacity improvement program.--
``(i) In general.--The term `border
planning, operations, technology, and capacity
improvement program' means any program which
includes 1 or more eligible activities to
support coordination and improvement in bi-
national transportation planning, operations,
efficiency, information exchange, safety, and
security at the international borders of the
United States with Canada and Mexico.
``(ii) Eligible activities.--For purposes
of this subparagraph, the term `eligible
activities' means--
``(I) highway and multimodal
planning or environmental studies,
``(II) cross-border port of entry
and safety inspection improvements,
including operational enhancements and
technology applications,
``(III) technology and information
exchange activities, and
``(IV) right-of-way acquisition,
design, and construction, as needed to
implement the enhancements or
applications described in subclauses
(II) and (III), to decrease air
pollution emissions from vehicles or
inspection facilities at border
crossings, or to increase highway
capacity at or near international
borders.
``(E) Freight intermodal connector project.--
``(i) In general.--The term `freight
intermodal connector project' means any project
for the construction of and improvements to
publicly owned freight intermodal connectors to
the National Highway System, the provision of
access to such connectors, and operational
improvements for such connectors (including
capital investment for intelligent
transportation systems), except that a project
located within the boundaries of an intermodal
freight facility shall only include highway
infrastructure modifications necessary to
facilitate direct intermodal access between the
connector and the facility.
``(ii) Criteria for approval.--The
Transportation Finance Corporation shall
consider in approving any freight intermodal
connector project the criteria set forth in the
report of the Department of Transportation to
Congress entitled `Pulling Together: The NHS
and its Connections to Major Intermodal
Terminals'.
``(iii) Freight intermodal connector.--The
term `freight intermodal connector' means the
roadway that connects to an intermodal freight
facility that carries or will carry intermodal
traffic.
``(iv) Intermodal freight facility.--The
term `intermodal freight facility' means a
port, airport, truck-rail terminal, and
pipeline-truck terminal.
``(3) Qualified public transportation project.--The term
`qualified public transportation project' means a project for
public transportation facilities or other facilities which are
eligible for assistance under title 49, United States Code,
including intercity passenger rail.
``(g) Limitation on Amount of Bonds Designated; Allocation of Bond
Proceeds.--
``(1) National limitation.--There is a Build America bond
limitation for each calendar year. Such limitation is--
``(A) with respect to bonds described in subsection
(e)(1)(A)--
``(i) $5,500,000,000 for 2005,
``(ii) $8,000,000,000 for 2006,
``(iii) $8,000,000,000 for 2007,
``(iv) $3,000,000,000 for 2008,
``(v) $3,000,000,000 for 2009,
``(vi) $2,500,000,000 for 2010, and
``(vii) except as provided in paragraph
(4), zero thereafter, plus
``(B) with respect to bonds described in subsection
(e)(1)(B), such amount each calendar year as determined
necessary by the Transportation Finance Corporation to
provide funds in the Build America Trust Account for
the repayment of Build America bonds at maturity,
except that the aggregate amount of such bonds for all
calendar years shall not exceed $9,000,000,000.
``(2) Allocation of bonds for highway and public
transportation purposes.--Except with respect to qualified
projects described in subsection (j)(3), and subject to
paragraph (3)--
``(A) Qualified highway projects.--From Build
America bonds issued under the annual limitation in
paragraph (1)(A), the Transportation Finance
Corporation shall allocate 80 percent of the net
spendable proceeds to the States for qualified highway
projects designated by law from recommendations
submitted to Congress identifying various projects
approved as meeting the criteria required for each such
project by the Transportation Finance Corporation.
``(B) Qualified public transportation projects.--
From Build America bonds issued under the annual
limitation in paragraph (1)(A), the Transportation
Finance Corporation shall allocate 20 percent of the
net spendable proceeds to the States for qualified
public transportation projects designated by law from
recommendations submitted to Congress identifying
various projects approved as meeting the criteria
required for each such project by the Transportation
Finance Corporation.
``(3) Minimum allocations to states.--In making allocations
for each calendar year under paragraph (2), the Transportation
Finance Corporation shall ensure that the amount allocated for
qualified projects located in each State for such calendar year
is not less than \1/2\ percent of the total amount allocated
for such year.
``(4) Carryover of unused issuance limitation.--If for any
calendar year the limitation amount imposed by paragraph (1)
exceeds the amount of Build America bonds issued during such
year, such excess shall be carried forward to one or more
succeeding calendar years as an addition to the limitation
imposed by paragraph (1) and until used by issuance of Build
America bonds.
``(5) Issuance of small denomination bonds.--From the Build
America bond limitation for each year, the Transportation
Finance Corporation shall issue a limited quantity of Build
America bonds in small denominations suitable for purchase as
gifts by individual investors wishing to show their support for
investing in America's infrastructure.
``(h) Special Rules Relating to Arbitrage.--
``(1) In general.--Subject to paragraph (2), an issue shall
be treated as meeting the requirements of this subsection if as
of the date of issuance, the Transportation Finance Corporation
reasonably expects--
``(A) to spend at least 85 percent of the net
spendable proceeds from the sale of the issue for 1 or
more qualified projects within the 5-year period
beginning on such date,
``(B) to incur a binding commitment with a third
party to spend at least 10 percent of the net spendable
proceeds from the sale of the issue, or to commence
construction, with respect to such projects within the
12-month period beginning on such date, and
``(C) to proceed with due diligence to complete
such projects and to spend the net spendable proceeds
from the sale of the issue.
``(2) Spent proceeds.--Net spendable proceeds are
considered spent by the Transportation Finance Corporation when
a sponsor of a qualified project obtains a reimbursement from
the Transportation Finance Corporation for eligible project
costs.
``(3) Rules regarding continuing compliance after 5-year
determination.--If at least 85 percent of the net spendable
proceeds from the sale of the issue is not expended for 1 or
more qualified projects within the 5-year period beginning on
the date of issuance, but the requirements of paragraph (1) are
otherwise met, an issue shall be treated as continuing to meet
the requirements of this subsection if the Transportation
Finance Corporation uses all unspent net spendable proceeds
from the sale of the issue to redeem bonds of the issue within
90 days after the end of such 5-year period.
``(4) Reallocation.--In the event the recipient of an
allocation under subsection (g) fails to demonstrate to the
satisfaction of the Transportation Finance Corporation that its
actions will allow the Transportation Finance Corporation to
meet the requirements under this subsection, the Transportation
Finance Corporation may redistribute the allocation meant for
such recipient to other recipients.
``(i) Recapture of Portion of Credit Where Cessation of
Compliance.--
``(1) In general.--If any bond which when issued purported
to be a Build America bond ceases to be such a qualified bond,
the Transportation Finance Corporation shall pay to the United
States (at the time required by the Secretary) an amount equal
to the sum of--
``(A) the aggregate of the credits allowable under
this section with respect to such bond (determined
without regard to subsection (c)) for taxable years
ending during the calendar year in which such cessation
occurs and the 2 preceding calendar years, and
``(B) interest at the underpayment rate under
section 6621 on the amount determined under
subparagraph (A) for each calendar year for the period
beginning on the first day of such calendar year.
``(2) Failure to pay.--If the Transportation Finance
Corporation fails to timely pay the amount required by
paragraph (1) with respect to such bond, the tax imposed by
this chapter on each holder of any such bond which is part of
such issue shall be increased (for the taxable year of the
holder in which such cessation occurs) by the aggregate
decrease in the credits allowed under this section to such
holder for taxable years beginning in such 3 calendar years
which would have resulted solely from denying any credit under
this section with respect to such issue for such taxable years.
``(3) Special rules.--
``(A) Tax benefit rule.--The tax for the taxable
year shall be increased under paragraph (2) only with
respect to credits allowed by reason of this section
which were used to reduce tax liability. In the case of
credits not so used to reduce tax liability, the
carryforwards and carrybacks under section 39 shall be
appropriately adjusted.
``(B) No credits against tax.--Any increase in tax
under paragraph (2) shall not be treated as a tax
imposed by this chapter for purposes of determining--
``(i) the amount of any credit allowable
under this part, or
``(ii) the amount of the tax imposed by
section 55.
``(j) Build America Trust Account.--
``(1) In general.--The following amounts shall be held in a
Build America Trust Account by the Transportation Finance
Corporation:
``(A) The proceeds from the sale of all bonds
issued under this section.
``(B) The amount of any matching contributions with
respect to such bonds.
``(C) The investment earnings on proceeds from the
sale of such bonds.
``(D) Any earnings on any amounts described in
subparagraph (A), (B), or (C).
``(2) Use of funds.--Amounts in the Build America Trust
Account may be used only to pay costs of qualified projects,
redeem Build America bonds, and fund the operations of the
Transportation Finance Corporation, except that amounts
withdrawn from the Build America Trust Account to pay costs of
qualified projects may not exceed the aggregate proceeds from
the sale of Build America bonds described in subsection
(e)(1)(A).
``(3) Use of remaining funds in build america trust
account.--Upon the redemption of all Build America bonds issued
under this section, any remaining amounts in the Build America
Trust Account shall be available to the Transportation Finance
Corporation to pay the costs of any qualified project.
``(4) Costs of qualified projects.--For purposes of this
section, the costs of qualified projects which may be funded by
amounts in the Build America Trust Account may only relate to
capital investments in depreciable assets and may not include
any costs relating to operations, maintenance, or rolling
stock.
``(5) Applicability of federal law.--The requirements of
any Federal law, including titles 23, 40, and 49 of the United
States Code, which would otherwise apply to projects to which
the United States is a party or to funds made available under
such law and projects assisted with those funds shall apply
to--
``(A) funds made available under the Build America
Trust Account for similar qualified projects, including
contributions required under subsection (k), and
``(B) similar qualified projects assisted by the
Transportation Finance Corporation through the use of
such funds.
``(6) Investment.--It shall be the duty of the
Transportation Finance Corporation to invest in investment
grade obligations such portion of the Build America Trust
Account as is not, in the judgment of the Board of Directors of
the Transportation Finance Corporation, required to meet
current withdrawals. To the maximum extent practicable,
investments should be made in securities that support
transportation investment at the State and local level.
``(k) State Contribution Requirements.--
``(1) In general.--For purposes of subsection (e)(3), the
State contribution requirement of this subsection is met with
respect to any qualified project if the Transportation Finance
Corporation has received from 1 or more States, not later than
the date of issuance of the bond, written commitments for
matching contributions of not less than 20 percent (or such
smaller percentage as determined under title 23, United States
Code, for such State) of the cost of the qualified project.
``(2) State matching contributions may not include federal
funds.--For purposes of this subsection, State matching
contributions shall not be derived, directly or indirectly,
from Federal funds, including any transfers from the Highway
Trust Fund under section 9503.
``(l) Utilization of Updated Construction Technology for Qualified
Projects.--For purposes of subsection (e)(4), the requirement of this
subsection is met if the appropriate State agency relating to the
qualified project has updated its accepted construction technologies to
match a list prescribed by the Secretary of Transportation and in
effect on the date of the approval of the project as a qualified
project.
``(m) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Administrative costs.--The term `administrative
costs' shall only include costs of issuance of Build America
bonds and operation costs of the Transportation Corporation.
``(2) Bond.--The term `bond' includes any obligation.
``(3) Net spendable proceeds.--The term `net spendable
proceeds' means the proceeds from the sale of any Build America
bond issued under this section reduced by not more than 5
percent of such proceeds for administrative costs.
``(4) State.--The term `State' shall have the meaning given
such term by section 101 of title 23, United States Code.
``(5) Treatment of changes in use.--For purposes of
subsection (e)(1)(A), the net spendable proceeds from the sale
of an issue shall not be treated as used for a qualified
project to the extent that the Transportation Finance
Corporation takes any action within its control which causes
such proceeds not to be used for a qualified project. The
Secretary shall specify remedial actions which may be taken
(including conditions to taking such remedial actions) to
prevent an action described in the preceding sentence from
causing a bond to fail to be a Build America bond.
``(6) Partnership; s corporation; and other pass-thru
entities.--In the case of a partnership, trust, S corporation,
or other pass-thru entity, rules similar to the rules of
section 41(g) shall apply with respect to the credit allowable
under subsection (a).
``(7) Bonds held by regulated investment companies.--If any
Build America 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.
``(8) Credits may be stripped.--Under regulations
prescribed by the Secretary--
``(A) In general.--There may be a separation
(including at issuance) of the ownership of a Build
America 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.
``(B) Certain rules to apply.--In the case of a
separation described in subparagraph (A), the rules of
section 1286 shall apply to the Build America bond as
if it were a stripped bond and to the credit under this
section as if it were a stripped coupon.
``(9) Credits may be transferred.--Nothing in any law or
rule of law shall be construed to limit the transferability of
the credit or bond allowed by this section through sale and
repurchase agreements.
``(10) Reporting.--The Transportation Finance Corporation
shall submit reports similar to the reports required under
section 149(e).
``(11) Prohibition on use of highway trust fund.--
Notwithstanding any other provision of law, no funds derived
from the Highway Trust Fund established under section 9503
shall be used to pay costs associated with the Build America
bonds issued under this section.''.
(b) Amendments to Other Code Sections.--
(1) Reporting.--Subsection (d) of section 6049 (relating to
returns regarding payments of interest) is amended by adding at
the end the following new paragraph:
``(8) Reporting of credit on build america bonds.--
``(A) In general.--For purposes of subsection (a),
the term `interest' includes amounts includible in
gross income under section 54(d) and such amounts shall
be treated as paid on the credit allowance date (as
defined in section 54(b)(4)).
``(B) Reporting to corporations, etc.--Except as
otherwise provided in regulations, in the case of any
interest described in subparagraph (A), subsection
(b)(4) shall be applied without regard to subparagraphs
(A), (H), (I), (J), (K), and (L)(i) of such subsection.
``(C) Regulatory authority.--The Secretary may
prescribe such regulations as are necessary or
appropriate to carry out the purposes of this
paragraph, including regulations which require more
frequent or more detailed reporting.''.
(2) Treatment for estimated tax purposes.--
(A) Individual.--Section 6654 (relating to failure
by individual to pay estimated income tax) is amended
by redesignating subsection (m) as subsection (n) and
by inserting after subsection (l) the following new
subsection:
``(m) Special Rule for Holders of Build America Bonds.--For
purposes of this section, the credit allowed by section 54 to a
taxpayer by reason of holding a Build America bond on a credit
allowance date shall be treated as if it were a payment of estimated
tax made by the taxpayer on such date.''.
(B) Corporate.--Subsection (g) of section 6655
(relating to failure by corporation to pay estimated
income tax) is amended by adding at the end the
following new paragraph:
``(5) Special rule for holders of build america bonds.--For
purposes of this section, the credit allowed by section 54 to a
taxpayer by reason of holding a Build America bond on a credit
allowance date shall be treated as if it were a payment of
estimated tax made by the taxpayer on such date.''.
(c) Clerical Amendments.--
(1) The table of subparts for part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
item:
``subpart h. nonrefundable credit for holders of build america
bonds.''.
(2) Section 6401(b)(1) is amended by striking ``and G'' and
inserting ``G, and H''.
(d) Effective Date.--The amendments made by this section shall
apply to obligations issued after the date of the enactment of this
Act.
SEC. 4. TRANSPORTATION FINANCE CORPORATION.
(a) Establishment and Status.--There is established a body
corporate to be known as the ``Transportation Finance Corporation''
(hereafter in this section referred to as the ``Corporation''). The
Corporation is not a department, agency, or instrumentality of the
United States Government, and shall not be subject to title 31, United
States Code.
(b) Principal Office; Application of Laws.--The principal office
and place of business of the Corporation shall be in the District of
Columbia, and, to the extent consistent with this section, the District
of Columbia Business Corporation Act (D.C. Code 29-301 et seq.) shall
apply.
(c) Functions of Corporation.--The Corporation shall--
(1) issue Build America bonds for the financing of
qualified projects as required under section 54 of the Internal
Revenue Code of 1986,
(2) establish and operate the Build America Trust Account
as required under section 54(j) of such Code,
(3) act as a centralized entity to provide financing for
qualified projects,
(4) leverage resources and stimulate public and private
investment in transportation infrastructure,
(5) encourage States to create additional opportunities for
the financing of transportation infrastructure and to provide
technical assistance to States, if needed,
(6) perform any other function the sole purpose of which is
to carry out the financing of qualified projects through Build
America bonds, and
(7) not later than February 15 of each year submit a report
to Congress--
(A) describing the activities of the Corporation
for the preceding year, and
(B) specifying whether the amounts deposited and
expected to be deposited in the Build America Trust
Account are sufficient to fully repay at maturity the
principal of any outstanding Build America bonds issued
pursuant to such section 54.
(d) Powers of Corporation.--The Corporation--
(1) may sue and be sued, complain and defend, in its
corporate name, in any court of competent jurisdiction,
(2) may adopt, alter, and use a seal, which shall be
judicially noticed,
(3) may prescribe, amend, and repeal such rules and
regulations as may be necessary for carrying out the functions
of the Corporation,
(4) may make and perform such contracts and other
agreements with any individual, corporation, or other private
or public entity however designated and wherever situated, as
may be necessary for carrying out the functions of the
Corporation,
(5) may determine and prescribe the manner in which its
obligations shall be incurred and its expenses allowed and
paid,
(6) may, as necessary for carrying out the functions of the
Corporation, employ and fix the compensation of employees and
officers,
(7) may lease, purchase, or otherwise acquire, own, hold,
improve, use, or otherwise deal in and with such property
(real, personal, or mixed) or any interest therein, wherever
situated, as may be necessary for carrying out the functions of
the Corporation,
(8) may accept gifts or donations of services or of
property (real, personal, or mixed), tangible or intangible, in
furtherance of the purposes of this Act, and
(9) shall have such other powers as may be necessary and
incident to carrying out this Act.
(e) Nonprofit Entity; Restriction on Use of Moneys; Conflict of
Interests; Audits.--
(1) Nonprofit entity.--The Corporation shall be a nonprofit
corporation and shall have no capital stock.
(2) Restriction.--No part of the Corporation's revenue,
earnings, or other income or property shall inure to the
benefit of any of its directors, officers, or employees, and
such revenue, earnings, or other income or property shall only
be used for carrying out the purposes of this Act.
(3) Conflict of interests.--No director, officer, or
employee of the Corporation shall in any manner, directly or
indirectly participate in the deliberation upon or the
determination of any question affecting his or her personal
interests or the interests of any corporation, partnership, or
organization in which he or she is directly or indirectly
interested.
(4) Audits.--
(A) Audits by independent certified public
accountants.--
(i) In general.--The Corporation's
financial statements shall be audited annually
in accordance with generally accepted auditing
standards by independent certified public
accountants that are certified by a regulatory
authority of a State or other political
subdivision of the United States. The audits
shall be conducted at the place or places where
the accounts of the Corporation are normally
kept. All books, accounts, financial records,
reports, files, and all other papers, things,
or property belonging to or in use by the
Corporation and necessary to facilitate the
audit shall be made available to the person or
persons conducting the audits, and full
facilities for verifying transactions with the
balances or securities held by depositories,
fiscal agents, and custodians shall be afforded
to such person or persons.
(ii) Reporting requirements.--The report of
each annual audit described in clause (i) shall
be included in the annual report required by
subsection (c)(8).
(B) Record keeping requirements.--The Corporation
shall ensure that each recipient of assistance from the
Corporation keeps--
(i) separate accounts with respect to such
assistance,
(ii) such records as may be reasonably
necessary to fully disclose--
(I) the amount and the disposition
by such recipient of the proceeds of
such assistance,
(II) the total cost of the project
or undertaking in connection with which
such assistance is given or used, and
the extent to which such costs are for
a qualified project, and
(III) the amount and nature of that
portion of the cost of the project or
undertaking supplied by other sources,
and
(iii) such other records as will facilitate
an effective audit.
(C) Audit and examination of books.--The
Corporation shall ensure that the Corporation, or any
of the Corporation's duly authorized representatives,
shall have access for the purpose of audit and
examination to any books, documents, papers, and
records of any recipient of assistance from the
Corporation that are pertinent to such assistance.
(f) Exemption From Taxes.--
(1) In general.--The Corporation, including its franchise,
capital, reserves, surplus, sinking funds, mortgages or other
security holdings, and income, shall be exempt from all
taxation now or hereafter imposed by the United States, by any
territory, dependency, or possession thereof, or by any State,
county, municipality, or local taxing authority, except that
any real property of the Corporation shall be subject to State,
territorial, county, municipal, or local taxation to the same
extent according to its value as other real property is taxed.
(2) Financial obligations.--Build America bonds or other
obligations issued by the Corporation and the interest on or
tax credits with respect to its bonds or other obligations
shall not be subject to taxation by any State, county,
municipality, or local taxing authority.
(g) Assistance for Transportation Purposes.--
(1) In general.--In order to carry out the corporate
functions described in subsection (c), the Corporation shall be
eligible to receive discretionary grants, contracts, gifts,
contributions, or technical assistance from any Federal
department or agency, to the extent permitted by law.
(2) Agreement.--In order to receive any assistance
described in this subsection, the Corporation shall enter into
an agreement with the Federal department or agency providing
such assistance, under which the Corporation agrees--
(A) to use such assistance to provide funding and
technical assistance only for activities which the
Board of Directors of the Corporation determines are
consistent with the corporate functions described in
subsection (c), and
(B) to review the activities of State
transportation agencies and other entities receiving
assistance from the Corporation to assure that the
corporate functions described in subsection (c) are
carried out.
(3) Construction.--Nothing in this section shall be
construed to establish the Corporation as a department, agency,
or instrumentality of the United States Government, or to
establish the members of the Board of Directors of the
Corporation, or the officers and employees of the Corporation,
as officers or employees of the United States Government.
(h) Management of Corporation.--
(1) Board of directors; membership; designation of
chairperson and vice chairperson; appointment considerations;
term; vacancies.--
(A) Board of directors.--The management of the
Corporation shall be vested in a board of directors
composed of 15 members appointed by the President, by
and with the advice and consent of the Senate.
(B) Chairperson and vice chairperson.--The
President shall designate 1 member of the Board to
serve as Chairperson of the Board and 1 member to serve
as Vice Chairperson of the Board.
(C) Individuals from private life.--Eleven members
of the Board shall be appointed from private life.
(D) Federal officers and employees.--Four members
of the Board shall be appointed from among officers and
employees of agencies of the United States concerned
with infrastructure development.
(E) Appointment considerations.--All members of the
Board shall be appointed on the basis of their
understanding of and sensitivity to infrastructure
development processes. Members of the Board shall be
appointed so that not more than 8 members of the Board
are members of any 1 political party.
(F) Terms.--Members of the Board shall be appointed
for terms of 3 years, except that of the members first
appointed, as designated by the President at the time
of their appointment, 5 shall be appointed for terms of
1 year and 5 shall be appointed for terms of 2 years.
(G) Vacancies.--A member of the Board appointed to
fill a vacancy occurring before the expiration of the
term for which that member's predecessor was appointed
shall be appointed only for the remainder of that term.
Upon the expiration of a member's term, the member
shall continue to serve until a successor is appointed
and is qualified.
(2) Compensation, actual, necessary, and transportation
expenses.--Members of the Board shall serve without additional
compensation, but may be reimbursed for actual and necessary
expenses not exceeding $100 per day, and for transportation
expenses, while engaged in their duties on behalf of the
Corporation.
(3) Quorum.--A majority of the Board shall constitute a
quorum.
(4) President of corporation.--The Board of Directors shall
appoint a president of the Corporation on such terms as the
Board may determine.
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