[Congressional Record Volume 141, Number 94 (Friday, June 9, 1995)]
[Extensions of Remarks]
[Pages E1217-E1218]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


    THE NEED FOR TAX-EXEMPT FINANCING FOR AMERICA'S MAJOR INTERMODAL 
                     PROJECT: THE ALAMEDA CORRIDOR

                                 ______


                           HON. STEPHEN HORN

                             of california

                    in the house of representatives

                         Thursday, June 8, 1995
  Mr. HORN. Mr. Speaker, on behalf of myself and Representatives 
Tucker, Royce, Becerra, Harman, Roybal-Allard, Torres, and Waters, I am 
introducing legislation [H.R. 1790] to permit tax-exempt financing of 
transportation facilities that are directly connected to the activities 
at a port. This a critical step in making a reality of our vision of a 
true national intermodal system. [[Page E1218]] 
  As the largest port complex in the Nation, the Port of Long Beach and 
the Port of Los Angeles play an indispensable role in our Nation's 
economy. The continued growth and success of the operations at the 
ports is important to Americans from North Dakota to North Carolina and 
Maine to California, not just to those of us in southern California. We 
are the ``Gateway to the Pacific'' which includes Asia and Latin 
America. The Federal Government has an important stake in seeing this 
gateway thrive.
  The linchpin of continued growth--to meeting the demands of the 21st 
century--is the Alameda corridor. Annually, the ports have returned 
billions of dollars in customs revenues to the national treasury and--
with their expension plans--promise to double cargo volume, and customs 
revenues.
  If landside access to these ports is not opened up, growth will be 
effectively capped. Lost customs and economic development revenue to 
the Federal Government will also be in the billions of dollars. The two 
ports have pooled their resources to purchase the existing Santa Fe, 
Southern Pacific, and Union Pacific Railroad Lines which come from 
central Los Angeles 20 miles to the harbor area. The integrated 
railroad corridor will generally follow the Alameda Street north-south 
route to the ports and enable container and other cargo to move 
directly from the ship to dockside rail for transit to points west, 
east, north, and south. The completed corridor will enable civilian and 
military cargo to come in various directions much more efficiently.
  If expansion is stalled, there will be freight diversions to 
alternative sites--with much talk from the Government of Mexico about 
constructing a new port in Ensenada. The current administration 
recognizes this fact. Secretary of Transportation Federico Pena has 
stated, ``The Corridor is not only a California issue, it's a national 
priority.''
  In order to build on that support, those of us in the Los Angeles/
Orange County delegation are working as a bipartisan coalition to 
ensure that the Federal Government plays an active role as a financial 
partner not only in the overall construction costs, but also in helping 
to see that early planning needs and already authorized grade crossings 
are started at the earliest opportunity.
  An integral part of this Federal role is the extension of tax-exempt 
bond financing authority to the Alameda corridor. Tax-exempt bond 
financing is critical to keeping debt service to a point where the 
Alameda corridor can be a successful operation. The bill we are 
introducing today is carefully crafted to limit the financial impact to 
the Federal Treasury. Its reach is limited. Currently, tax-exempt 
financing is available to construction activities which are immediately 
connected to a wharf. This bill is merely an extension of that logic, 
whereby transportation facilities that allow cargo to flow to and from 
that wharf are also given tax-exempt status. Again, it is important to 
remember that the long-term financial gains to the Federal Government 
through increased customs revenues far outweigh any short-term economic 
loss which may result from that legislation.
  The Federal funding requirements to make the Alameda corridor a 
reality are tremendous. The corridor will be the largest intermodal 
project in the Nation. Securing the requisite Federal assistance--
estimated to be less than 40 percent of the total costs--will demand 
working as a unified coalition not only at every level of government, 
but as a unified coalition of the private and public sectors. The 
Alameda corridor has tremendous support from our business and political 
leaders. The task is to translate that support into a constructed 
reality. This legislation is a critical step toward that goal.
  Mr. Speaker, below is the text of H.R. 1790:

                               H.R. 1790
       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. TAX-EXEMPT FINANCING OF CERTAIN TRANSPORTATION 
                   FACILITIES.

       (a) In General.--Subsection (c) of section 142 of the 
     Internal Revenue Code of 1986 (relating to exempt facility 
     bonds) is amended--
       (1) by redesignating paragraph (2) as paragraph (3), and
       (2) by inserting after paragraph (1) the following new 
     paragraph:
       ``(2) Related transportation facilities.--
       ``(A) In general.--Transportation facilities (including 
     trackage and related rail facilities, but not rolling stock) 
     shall be treated as facilities described in paragraph (2) of 
     subsection (a) if at least 80 percent of the use of the 
     facilities (determined on an annual basis) is to be in 
     connection with the transport of cargo to or from a facility 
     described in such paragraph (without regard to this 
     paragraph).
       ``(B) Governmental ownership requirement.--In the case of 
     transportation facilities described in subparagraph (A), 
     subsection (b)(1) shall apply without regard to subparagraph 
     (B)(ii) thereof.''
       (b) Change in Use.--Section 150(b) of the Internal Revenue 
     Code of 1986 (relating to change in use of facilities 
     financed with tax-exempt private activity bonds) is amended 
     by adding at the end the following new paragraph:
       ``(7) Certain transportation facilities.--
       In the case of any transportation facility--
       ``(A) with respect to which financing is provided from the 
     proceeds of any private activity bond which, when issued, 
     purported to be a tax-exempt bond described in paragraph (2) 
     of section 142(a) by reason of section 142(c)(2), and
       ``(B) with respect to which the requirements of section 
     142(c)(2) are not met,

     no deduction shall be allowed under this chapter for interest 
     on such financing which accrues during the period beginning 
     on the 1st day of the taxable year in which such facility 
     fails to meet such requirements and ending on the date such 
     facility meets such requirements.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.
     

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