To amend the Internal Revenue Code of 1986 to provide additional tax incentives for public-private partnerships in financing of highway, mass transit, high-speed rail, and intermodal transfer facilities projects, and for other purposes.

May 10, 2001

Mr. SMITH of New Hampshire (for himself and Mr. INHOFE) introduced the following bill; which was read twice and referred to the Committee on Finance

To amend the Internal Revenue Code of 1986 to provide additional tax incentives for public-private partnerships in financing of highway, mass transit, high-speed rail, and intermodal transfer facilities projects, 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 `Multimodal Transportation Financing Act'.

SEC. 2. TAX-EXEMPT FINANCING OF QUALIFIED HIGHWAY INFRASTRUCTURE.

(a) TREATMENT AS EXEMPT FACILITY BOND- Subsection (a) of section 142 of the Internal Revenue Code of 1986 (relating to exempt facility bond) is amended by striking `or' at the end of paragraph (11), by striking the period at the end of paragraph (12) and inserting `, or', and by adding at the end the following:

`(13) qualified highway infrastructure projects.'.

(b) QUALIFIED HIGHWAY INFRASTRUCTURE PROJECTS- Section 142 of the Internal Revenue Code of 1986 is amended by adding at the end the following:

`(k) QUALIFIED HIGHWAY INFRASTRUCTURE PROJECTS-

`(1) IN GENERAL- For purposes of subsection (a)(13), the term `qualified highway infrastructure project' means a project--

`(A) for the construction, reconstruction, or maintenance of a highway, including related startup costs, and

`(B) meeting the requirements of paragraph (2).

`(2) PROJECT REQUIREMENTS- A project meets the requirements of this paragraph if the project--

`(A) serves the general public,

`(B) is located on publicly-owned rights-of-way, and

`(C) is publicly owned or the ownership of the highway constructed, reconstructed, or maintained under the project reverts to the public.'

(c) EXEMPTION FROM GENERAL STATE VOLUME CAPS- Paragraph (3) of section 146(g) of the Internal Revenue Code of 1986 (relating to exception for certain bonds) is amended--

(1) by striking `or (12)' and inserting `(12), or (13)', and

(2) by striking `and environmental enhancements of hydroelectric generating facilities' and inserting `environmental enhancements of hydroelectric generating facilities, and qualified highway infrastructure projects'.

(d) EXEMPTION FROM LIMITATION ON USE FOR LAND ACQUISITION- Section 147(c)(3) of the Internal Revenue Code of 1986 (relating to exception for certain land acquired for environmental purposes, etc.) is amended by striking `or wharf' both places it appears and inserting `wharf, or qualified highway infrastructure project'.

(e) TREATMENT OF CERTAIN REFUNDING BONDS-

(1) IN GENERAL- Paragraph (2) of section 149(d) of the Internal Revenue Code of 1986 (relating to certain private activity bonds) is amended by inserting `or any exempt facility bond issued as part of an issue described in paragraph (13) of section 142(a) (relating to qualified highway infrastructure projects)' after `other than a qualified 501(c)(3) bond'.

(2) SPECIAL RULES- Paragraph (6) of section 149(d) of such Code is amended to read as follows:

`(6) SPECIAL RULES FOR PURPOSES OF PARAGRAPH (3)- For purposes of paragraph (3)--

`(A) bonds issued before October 22, 1986, shall be taken into account under subparagraph (A)(i) thereof except--

`(i) a refunding which occurred before 1986 shall be treated as an advance refunding only if the refunding bond was issued more than 180 days before the redemption of the refunded bond, and

`(ii) a bond issued before 1986, shall be treated as advance refunded no more than once before March 15, 1986, and

`(B) a bond issued as part of an issue that is either the 1st or 2nd advance refunding of the original bond shall be treated as only the 1st advance refunding of the original bond if--

`(i) at least 95 percent or more of the net proceeds of the original bond issue are to be used to finance a highway infrastructure project (regardless of whether the original bond was issued as a private activity bond),

`(ii) the original bonds and applicable refunding bonds are or are reasonably expected to be primarily secured by project-based revenues, and

`(iii) in any case in which--

`(I) the original bonds or applicable refunding bonds are private activity bonds issued as part of an issue at least 95 percent or more of the net proceeds of which are to be used to finance a qualified highway infrastructure project described in section 142(a)(13), the refunding bonds of the issue and original bonds of the issue satisfy the requirements of section 147(b), or

`(II) the original bonds and applicable refunding bonds are not private activity bonds, the second generation advance refunding bonds of the issue (and any future bonds of the issue refunding such bonds) satisfy the requirements of section 147(b).'.

(3) SPECIAL RULE RELATING TO MATURITY LIMITATION- Section 147(b) of such Code (relating to maturity limitations) is amended by adding at the end the following:

`(6) SPECIAL RULE FOR CERTAIN HIGHWAY INFRASTRUCTURE PROJECTS-

`(A) IN GENERAL- In the case of bonds of an issue described in section 149(d)(6)(B), the limit described in paragraph (1)(B) shall be reduced--

`(i) in any case in which the original bonds or applicable refunding bonds are private activity bonds, by the remaining weighted average maturity of the escrowed bonds with respect to both the first and second generation advance refunding, and

`(ii) in any case in which the original bonds and applicable refunding bonds are not private activity bonds, by the remaining weighted average maturity of the escrowed bonds with respect to the second generation advance refunding.

`(B) REMAINING WEIGHTED AVERAGE MATURITY OF ESCROWED BONDS- For purposes of subparagraph (A), the remaining weighted average maturity of the escrowed bonds is equal to the weighted average maturity, calculated as of the applicable refunding bond issue date--

`(i) with respect to subparagraph (A)(i), of the applicable bonds advance refunded, and

`(ii) with respect to subparagraph (A)(ii), of the applicable bonds directly refunded by the second generation advance refunding bonds, and

treating any date of actual early redemption as a maturity date for this purpose.

(f) EFFECTIVE DATE- The amendments made by this section shall apply to bonds issued after the date of enactment of this Act.

SEC. 3. MASS COMMUTING FACILITIES.

(a) EXEMPTION FROM STATE VOLUME CAP- Section 146(g)(3) of the Internal Revenue Code of 1986 (relating to exception for certain bonds), as amended by section 2, is amended--

(1) by inserting `(3),' after `(2),', and

(2) by inserting `mass commuting facilities,' after `wharves,'.

(b) INCLUSION OF ROLLING STOCK- Section 142(c) of the Internal Revenue Code of 1986 (relating to airports, docks and wharves, mass commuting facilities and high-speed intercity rail facilities) is amended by adding at the end the following new paragraph:

`(3) MASS COMMUTING FACILITIES- The term `mass commuting facilities' includes rolling stock related to such facilities.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to bonds issued after the date of enactment of this Act.

SEC. 4. MODIFICATION OF DEFINITION OF HIGH-SPEED INTERCITY RAIL FACILITIES.

(a) IN GENERAL- Section 142(i)(1) of the Internal Revenue Code of 1986 (defining high-speed intercity rail facilities) is amended by striking ` and their baggage' and all that follows and inserting `on high speed rail corridors designated under section 104(d)(2) of title 23, United

States Code, or on corridors using magnetic levitation technology.'.

(b) EFFECTIVE DATE- The amendments made by this section shall apply to bonds issued after the date of enactment of this Act.

SEC. 5. TAX-EXEMPT FINANCING OF INTERMODAL TRANSFER FACILITIES.

(a) TREATMENT AS EXEMPT FACILITY BOND- Subsection (a) of section 142 of the Internal Revenue Code of 1986 (relating to exempt facility bond), as amended by section 2(a), is amended by striking `or' at the end of paragraph (12), by striking the period at the end of paragraph (13) and inserting `, or', and by adding at the end the following:

`(14) intermodal transfer facilities.'.

(b) INTERMODAL TRANSFER FACILITIES- Section 142 of the Internal Revenue Code of 1986, as amended by section 2(b), is amended by adding at the end the following:

`(l) INTERMODAL TRANSFER FACILITIES- For purposes of subsection (a)(14), the term `intermodal transfer facilities' means any facility for the transfer of people or goods between the same or different transportation modes.'.

(c) EXEMPTION FROM GENERAL STATE VOLUME CAPS- Paragraph (3) of section 146(g) of the Internal Revenue Code of 1986 (relating to exception for certain bonds), as amended by section 2(c), is amended--

(1) by striking `or (13)' and inserting `(13), or (14)', and

(2) by striking `and qualified highway infrastructure projects' and inserting `qualified highway infrastructure projects, and intermodal transfer facilities'.

(d) EXEMPTION FROM LIMITATION ON USE FOR LAND ACQUISITION- Section 147(d)(3) of the Internal Revenue Code of 1986 (relating to exception for certain land acquired for environmental purposes, etc.), as amended by section 2(d), is amended by striking `or qualified highway infrastructure project' both places it appears and inserting `qualified highway infrastructure project, or intermodal transfer facility'.

(e) CONFORMING AMENDMENTS- Subsection (c) of section 142 of the Internal Revenue Code of 1986 is amended--

(1) by striking `or (11)' both places it appears in paragraphs (1) and (2) and inserting `, (11), or (14)', and

(2) by striking `AND HIGH-SPEED INTERCITY RAIL FACILITIES' in the heading thereof and inserting `, HIGH-SPEED INTERCITY RAIL FACILITIES, AND INTERMODAL TRANSFER FACILITIES'.

(f) EFFECTIVE DATE- The amendments made by this section shall apply to bonds issued after the date of enactment of this Act.

END