IN THE SENATE OF THE UNITED STATES
June 27, 2013
Mr. Wyden (for himself and Mr. Hoeven) introduced the following bill; which was read twice and referred to the Committee on Finance
To provide $50,000,000,000 in new transportation infrastructure funding through bonding to empower States and local governments to complete significant infrastructure projects across all modes of transportation, including roads, bridges, rail and transit systems, ports, and inland waterways, and for other purposes.
This Act may be cited as the
Transportation and Regional
Infrastructure Project Bonds Act of 2013
Findings and purpose
Congress finds the following:
Our Nation's highways, transit systems, railroads, ports, and inland waterways drive our economy, enabling all industries to achieve growth and productivity that makes America strong and prosperous.
The establishment, maintenance, and improvement of the national transportation network is a national priority, for economic, environmental, energy, security, and other reasons.
The ability to move people and goods is critical to maintaining State, metropolitan, rural, and local economies.
The construction of infrastructure requires combining skills from numerous occupations, including those in the contracting, engineering, planning and design, materials supply, manufacturing, distribution, and safety industries.
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.
Investment in transportation infrastructure creates jobs and spurs economic activity to put people back to work and stimulate the economy.
Every billion dollars in transportation investment has the potential to create up to 30,000 jobs.
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.
Numerous experts have noted that the estimated cost to maintain and improve our Nation's highways, bridges, and other critical transportation infrastructure significantly exceeds what is currently being provided by all levels of government.
The purpose of this Act is to provide financing for additional transportation infrastructure capital investments.
Credit to holders of TRIP bonds
Subpart I of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
For purposes of this subpart, the term TRIP bond means any bond issued as part of an issue if—
100 percent of the available project proceeds of such issue are to be used for expenditures incurred after the date of the enactment of this section for 1 or more qualified projects pursuant to an allocation of such proceeds to such project or projects by a State infrastructure bank,
the bond is issued by or for the benefit of a State infrastructure bank and is in registered form (within the meaning of section 149(a)),
the State infrastructure bank designates such bond for purposes of this section,
the term of each bond which is part of such issue does not exceed 30 years,
the issue meets the requirements of subsection (e),
the State infrastructure bank certifies that the State meets the State contribution requirement of subsection (h), as in effect on the date of issuance, and
the State infrastructure bank certifies the State meets the requirement described in subsection (i).
For purposes of this section—
The term qualified project means a capital transportation infrastructure project of any governmental unit or other person, including roads, bridges, rail and transit systems, ports, and inland waterways proposed and approved by a State infrastructure bank, but does not include costs of operations or maintenance with respect to such project.
Such term also includes any flood damage risk reduction
project with a completed Report of the Chief of Engineers, with the proceeds of
issued bonds available for a State to provide to the United States Army Corps
of Engineers (under
section 5 of the Act entitled
An Act authorizing the
construction of certain public works on rivers and harbors for flood control,
and for other purposes,
approved June 22, 1936 (
33 U.S.C. 701h
in excess of any required non-Federal cost share for such project.
Applicable credit rate
In lieu of section 54A(b)(3), for purposes of section 54A(b)(2), the applicable credit rate with respect to an issue under this section is the rate equal to an average market yield (as of the day before the date of sale of the issue) on outstanding comparable-term corporate debt obligations (determined in such manner as the Secretary prescribes).
Limitation on amount of bonds designated
The maximum aggregate face amount of bonds which may be designated under subsection (a) by any State infrastructure bank shall not exceed the TRIP bond limitation amount allocated to such bank under paragraph (3).
National limitation amount
There is a TRIP bond limitation amount for each calendar year. Such limitation amount is—
$5,000,000,000 for 2014,
$5,000,000,000 for 2015,
$10,000,000,000 for 2016,
$10,000,000,000 for 2017,
$10,000,000,000 for 2018,
$10,000,000,000 for 2019, and
except as provided in paragraph (4), zero thereafter.
Allocations to States
The TRIP bond limitation amount for each calendar year shall be allocated by the Secretary among the States such that each State is allocated 2 percent of such amount.
Return of unused allocations
Any allocation to a State under subparagraph (A) which remains unused on the last day of the calendar year for which the allocation was made shall be relinquished by the State and reallocated by the Secretary proportionally among participating States.
Carryover of unused issuance limitation
If for any calendar year the TRIP bond limitation amount under paragraph (2) exceeds the amount of TRIP bonds issued during such year, such excess shall be carried forward to 1 or more succeeding calendar years as an addition to the TRIP bond limitation amount under paragraph (2) for such succeeding calendar year and until used by issuance of TRIP bonds.
Special rules relating to expenditures
An issue shall be treated as meeting the requirements of this subsection if, as of the date of issuance, the State infrastructure bank reasonably expects—
at least 100 percent of the available project proceeds of such issue are to be spent for 1 or more qualified projects within the 5-year expenditure period beginning on such date,
within the 12-month period beginning on such date, to incur a binding commitment with a third party for such third party—
to spend at least 10 percent of the proceeds of such issue within the 12-month period following the date of entering into such commitment, or
to commence construction within the 12-month period following the date of entering into such commitment with respect to any qualified project or combination of qualified projects the costs of which account for at least 10 percent of the proceeds of such issue, and
to proceed with due diligence to complete such projects and to spend the proceeds of such issue.
Rules regarding continuing compliance after 5-year determination
To the extent that less than 100 percent of the available project proceeds of such issue are expended by the close of the 5-year expenditure period beginning on the date of issuance, the State infrastructure bank shall redeem all of the nonqualified bonds within 90 days after the end of such period. For purposes of this paragraph, the amount of the nonqualified bonds required to be redeemed shall be determined in the same manner as under section 142.
Recapture of portion of credit where cessation of compliance
If any bond which when issued purported to be a TRIP bond ceases to be such a bond, the State infrastructure bank shall pay to the United States (at the time required by the Secretary) an amount equal to the sum of—
the aggregate of the credits allowable under section 54A with respect to such bond (determined without regard to section 54A(c)) for taxable years ending during the calendar year in which such cessation occurs and each succeeding calendar year ending with the calendar year in which such bond is redeemed by the bank, and
interest at the underpayment rate under section 6621 on the amount determined under paragraph (1) for each calendar year for the period beginning on the first day of such calendar year.
TRIP Bonds Trust Accounts
The following amounts shall be held in a TRIP Bonds Trust Account (including 1 or more subaccounts) by each State infrastructure bank:
The proceeds from the sale of all bonds issued by or for the benefit of such bank under this section.
The amounts described in subsection (h).
Any earnings on any amounts described in subparagraph (A) or (B).
Use of funds
Amounts in each TRIP Bonds Trust Account may be used only to pay costs of qualified projects, pay interest (if any) on TRIP bonds, and redeem TRIP bonds, except that amounts withdrawn from the TRIP Bonds Trust Account to pay costs of qualified projects may not exceed the proceeds from the sale of TRIP bonds described in subsection (a)(1).
Use of remaining funds in TRIP bonds trust account
Upon the redemption of all TRIP bonds issued by the State infrastructure bank under this section, any remaining amounts in the TRIP Bonds Trust Account held by such bank shall be available to pay the costs of any qualified project in such State.
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—
funds made available under each TRIP Bonds Trust Account for similar qualified projects, other than contributions required under subsection (h), and
similar qualified projects assisted through the use of such funds.
Subject to subsections (e) and (f), it shall be the duty of the State infrastructure bank to invest in investment grade obligations such portion of the TRIP Bonds Trust Account held by such Bank as is not, in the judgment of such bank, required to meet current withdrawals. To the extent cost-effective, investments should be made in securities that support infrastructure investment at the State and local level.
State contribution requirements
For purposes of subsection (a)(6), the State contribution requirement of this subsection is met if the State infrastructure bank has obtained a commitment, not later than the date of issuance of the bond, for deposit into the TRIP Bonds Trust Account equal annual installments sufficient, together with earnings thereon, to repay the principal of the TRIP bond at maturity.
State contributions may not include Federal funds
For purposes of this subsection, State contributions shall not be derived, directly or indirectly, from Federal funds, including any transfers from the Highway Trust Fund under section 9503.
Requirements in lieu of any other matching contribution requirements
For purposes of subsection (g)(4), the TRIP bond proceeds may be applied toward any State matching contribution requirement under any other Federal law.
Utilization of updated construction technology for qualified projects
For purposes of subsection (a)(7), the requirement of this subsection is met if the appropriate State agency relating to the qualified project is utilizing updated construction technologies.
Other definitions and special rules
For purposes of this section—
State infrastructure bank
The term State infrastructure bank means a State infrastructure bank established under section 610 of title 23, United States Code, and includes a joint venture among 2 or more State infrastructure banks. Such term also includes, with respect to any State that has not established a State infrastructure bank prior to the date of the enactment of this section, the State Department of Transportation of such State, or such other public instrumentality designated by the State to issue bonds under this section.
Notwithstanding any other provision of law, a State infrastructure bank shall be authorized to perform any of the functions necessary to carry out the purposes of this section, including the making of direct grants to qualified projects from available project proceeds of TRIP bonds issued by such bank.
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 for credits under this section.
Paragraph (1) of section 54A(d) of the Internal Revenue Code of 1986 is amended—
or at the end of subparagraph (D),
or at the end of subparagraph (E),
by inserting after subparagraph (E) the following new subparagraph:
a TRIP bond,
(paragraphs (3), (4), and (6), in the case of a TRIP bond) after
of section 54A(d)(2) of such Code is amended by striking
the end of clause (iv), by striking the period at the end of clause (v) and
, and, and by adding at the end the following new
in the case of a TRIP bond, a purpose specified in section 54G(a)(1).
The table of sections for subpart I of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:
Sec. 54G. TRIP bonds.
The amendments made by this Act shall apply to bonds issued after December 31, 2013.