HR 4243 IHCommentsClose CommentsPermalink

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

November 15, 2007

Mr. POMEROY (for himself, Mr. BRADY of Texas, and Ms. HERSETH SANDLIN) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Education and Labor and Natural Resources, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concernedCommentsClose CommentsPermalink

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

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

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

SEC. 2. DEFINITIONS.

In this Act:CommentsClose CommentsPermalink





(1) BUREAU- The term `Bureau' means the Bureau of Indian Affairs.CommentsClose CommentsPermalink





(2) INDIAN- The term `Indian' means any individual who is a member of an Indian tribe.CommentsClose CommentsPermalink





(3) INDIAN TRIBE-CommentsClose CommentsPermalink





(A) IN GENERAL- The term `Indian tribe' has the meaning given the term `Indian tribal government' in section 7701(a)(40) of the Internal Revenue Code of 1986 (as modified by section 7871(d) of that Code).CommentsClose CommentsPermalink





(B) INCLUSION- The term `Indian tribe' includes any consortium of Indian tribes approved by the Secretary.CommentsClose CommentsPermalink





(4) SECRETARY- The term `Secretary' means the Secretary of the Interior.CommentsClose CommentsPermalink





(5) TRIBAL SCHOOL- The term `tribal school' means an elementary school, secondary school, or dormitory that--CommentsClose CommentsPermalink





(A) is operated by a tribal organization or the Bureau for the education of Indian children; andCommentsClose CommentsPermalink





(B) receives financial assistance for the operation of the school or dormitory under an appropriation for the Bureau under a contract, grant, or agreement, or for a Bureau-operated school, under--CommentsClose CommentsPermalink





(i) section 102, 103(a), or 208 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450f, 450h(a), and 458d); orCommentsClose CommentsPermalink





(ii) the Tribally Controlled Schools Act of 1988 (25 U.S.C. 2501 et seq.).CommentsClose CommentsPermalink

SEC. 3. ISSUANCE OF BONDS.

(a) In General- The Secretary shall establish a pilot program under which the Secretary shall provide to eligible Indian tribes the authority to issue qualified tribal school modernization bonds to provide funds for the construction, rehabilitation, and repair of tribal schools, including advance planning and design of tribal schools.CommentsClose CommentsPermalink





(b) Eligibility-CommentsClose CommentsPermalink





(1) IN GENERAL- To be eligible to issue a qualified tribal school modernization bond under the program under subsection (a), an Indian tribe shall--CommentsClose CommentsPermalink





(A) prepare and submit to the Secretary a plan of construction that meets the requirements of paragraph (2);CommentsClose CommentsPermalink





(B) provide for quarterly and final inspection by the Bureau of each project to be funded by the bond; andCommentsClose CommentsPermalink





(C) ensure that the facilities to be funded by the bond will be used primarily for elementary and secondary educational purposes for the period during which the bond remains outstanding.CommentsClose CommentsPermalink





(2) PLAN OF CONSTRUCTION- The requirements referred to in paragraph (1)(A) are that the plan shall--CommentsClose CommentsPermalink





(A) contain a description of the construction to be carried out using funds provided under a qualified tribal school modernization bond;CommentsClose CommentsPermalink





(B) demonstrate that a comprehensive survey has been carried out regarding the construction needs of the applicable tribal school;CommentsClose CommentsPermalink





(C) contain assurances that funding under the bond will be used only for the activities described in the plan;CommentsClose CommentsPermalink





(D) contain a response to the evaluation criteria contained in the document entitled `Instructions and Application for Replacement School Construction, Revision 6' and dated February 6, 1999; andCommentsClose CommentsPermalink





(E) contain any other reasonable and related information that the Secretary determines to be appropriate.CommentsClose CommentsPermalink





(3) PRIORITY- In determining whether an Indian tribe is eligible to participate in the program under this section, the Secretary shall give priority to Indian tribes that, as demonstrated by the plans of construction of the Indian tribes, will fund projects--CommentsClose CommentsPermalink





(A) described in the list of the Bureau entitled `Education Facilities Replacement Construction Priorities List as of FY 2004' (69 Fed. Reg. 13870) (or successor regulations); orCommentsClose CommentsPermalink





(B) that meet the criteria for ranking schools described in the document entitled `Instructions and Application for Replacement School Construction, Revision 6' and dated February 6, 1999.CommentsClose CommentsPermalink





(4) ADVANCE PLANNING AND DESIGN FUNDING-CommentsClose CommentsPermalink





(A) IN GENERAL- An Indian tribe may propose in the plan of construction of the Indian tribe to receive advance planning and design funding from the tribal school modernization escrow account established under subsection (f)(2).CommentsClose CommentsPermalink





(B) CONDITIONS- As a condition of receiving advance planning and design funds under subparagraph (A), an Indian tribe shall agree--CommentsClose CommentsPermalink





(i) to issue qualified tribal school modernization bonds after the receipt of the funds; andCommentsClose CommentsPermalink





(ii) to deposit into the escrow account or a fund managed by a trustee under subsection (d)(3) an amount equal to the amount of funds received from the escrow account.CommentsClose CommentsPermalink





(c) Permissible Activities- In addition to the use described in subsection (a), an Indian tribe may use amounts received through the issuance of a qualified tribal school modernization bond--CommentsClose CommentsPermalink





(1) to enter into, and make payments under, contracts with licensed and bonded architects, engineers, and construction firms--CommentsClose CommentsPermalink





(A) to determine the needs of a tribal school; andCommentsClose CommentsPermalink





(B) for the design and engineering of a tribal school;CommentsClose CommentsPermalink





(2) to enter into, and make payments under, contracts with financial advisors, underwriters, attorneys, trustees, and other professionals to provide assistance to the Indian tribe in issuing the bonds; andCommentsClose CommentsPermalink





(3) to carry out other such activities as the Secretary determines to be appropriate.CommentsClose CommentsPermalink





(d) Bond Trustee-CommentsClose CommentsPermalink





(1) IN GENERAL- Notwithstanding any other provision of law, any qualified tribal school modernization bond issued by an Indian tribe under this section shall be subject to a trust agreement between the Indian tribe and a trustee.CommentsClose CommentsPermalink





(2) TRUSTEE- Any bank or trust company that meets the requirements established by the Secretary may serve as a trustee for purposes of paragraph (1).CommentsClose CommentsPermalink





(3) CONTENT OF TRUST AGREEMENT- A trust agreement entered into by an Indian tribe under this subsection shall specify that the trustee, with respect to any bond issued under this section, shall--CommentsClose CommentsPermalink





(A) act as a repository for the proceeds of the bond;CommentsClose CommentsPermalink





(B) make payments to bondholders;CommentsClose CommentsPermalink





(C) receive, as a condition to the issuance of the bond, a transfer of funds from the tribal school modernization escrow account under subsection (f)(2), or from other funds furnished by or on behalf of the Indian tribe, in an amount that, together with interest earnings from the investment of the funds in obligations of or fully guaranteed by the United States, or from other investments under subsection (j), will be sufficient to pay timely and in full the entire principal amount of the bond on the stated maturity date of the bond;CommentsClose CommentsPermalink





(D) invest the funds received in accordance with subparagraph (C); andCommentsClose CommentsPermalink





(E) hold and invest the funds in a segregated fund or account under the agreement, to be used solely to pay the costs of activities described in subsection (c).CommentsClose CommentsPermalink





(4) REQUIREMENTS FOR MAKING DIRECT PAYMENTS-CommentsClose CommentsPermalink





(A) IN GENERAL- Notwithstanding any other provision of law, the trustee shall make each payment described in paragraph (3)(E) in accordance with such requirements as the Indian tribe may prescribe in the trust agreement under paragraph (3).CommentsClose CommentsPermalink





(B) PAYMENTS TO CONTRACTORS- As a condition of making a payment to a contractor under paragraph (3)(E), the trustee shall require an inspection of the project of the contractor, to ensure the completion of the project, by--CommentsClose CommentsPermalink





(i) a local financial institution; orCommentsClose CommentsPermalink





(ii) an independent inspecting architect or engineer.CommentsClose CommentsPermalink





(C) CONTRACTS- Each contract under paragraphs (1) and (2) of subsection (c) shall require, or be renegotiated to require, that each payment under the contract shall be made in accordance with this subsection.CommentsClose CommentsPermalink





(e) Payments of Principal and Interest-CommentsClose CommentsPermalink





(1) PRINCIPAL-CommentsClose CommentsPermalink





(A) IN GENERAL- No principal payment on any qualified tribal school modernization bond shall be required until the final, stated maturity of the bond.CommentsClose CommentsPermalink





(B) MATURITY-CommentsClose CommentsPermalink





(i) IN GENERAL- The final, stated maturity of a qualified tribal school modernization bond shall be not later than the date that is 15 years after the date of issuance of the bond.CommentsClose CommentsPermalink





(ii) EXPIRATION- On expiration of a qualified tribal school modernization bond under clause (i), the entire outstanding principal under the bond shall become due and payable.CommentsClose CommentsPermalink





(2) INTEREST- In lieu of interest on a qualified tribal school modernization bond, there shall be provided a tax credit under section 1400U of the Internal Revenue Code of 1986.CommentsClose CommentsPermalink





(f) Bond Guarantees-CommentsClose CommentsPermalink





(1) IN GENERAL- Payment of the principal portion of a qualified tribal school modernization bond issued under this section shall be guaranteed solely by amounts deposited with each respective bond trustee as described in subsection (d)(3)(C).CommentsClose CommentsPermalink





(2) ESCROW ACCOUNT-CommentsClose CommentsPermalink





(A) IN GENERAL- The Secretary may deposit not more than $50,000,000 into a tribal school modernization escrow account.CommentsClose CommentsPermalink





(B) ADDITIONAL AMOUNTS-CommentsClose CommentsPermalink





(i) IN GENERAL- The Secretary may accept for transfer into the tribal school modernization escrow account amounts from, as the Secretary determines to be appropriate--CommentsClose CommentsPermalink





(I) other Federal departments and agencies (such as amounts made available for facility improvement and repairs);CommentsClose CommentsPermalink





(II) non-Federal public or private sources.CommentsClose CommentsPermalink





(ii) TREATMENT- Amounts transferred into the escrow account pursuant to clause (i) shall not reduce the amount eligible to be deposited into the account under subparagraph (A).CommentsClose CommentsPermalink





(C) INVESTMENT OF CERTAIN FUNDS- Amounts made available to carry out any project included on the list of the Bureau entitled `Education Facilities Replacement Construction Priorities List as of FY 2004' (or successor regulations) (69 Fed. Reg. 13870) shall--CommentsClose CommentsPermalink





(i) be invested in accordance with subsection (j); andCommentsClose CommentsPermalink





(ii) at the discretion of the Secretary--CommentsClose CommentsPermalink





(I) be used to pay any increase in project costs or other facility costs of the project for which the amounts are made available; orCommentsClose CommentsPermalink





(II) be deposited into the tribal school modernization escrow account.CommentsClose CommentsPermalink





(g) Limitations-CommentsClose CommentsPermalink





(1) OBLIGATION TO REPAY-CommentsClose CommentsPermalink





(A) IN GENERAL- Notwithstanding any other provision of law, the principal amount of any qualified tribal school modernization bond issued under this section shall be repaid only to the extent of any escrowed funds provided under subsection (d)(3)(C).CommentsClose CommentsPermalink





(B) TREATMENT- No qualified tribal school modernization bond issued by an Indian tribe shall be an obligation of, and no payment of the principal of such a bond shall be guaranteed by, the United States, an Indian tribe, or a tribal school.CommentsClose CommentsPermalink





(2) LAND AND FACILITIES- No land or facility purchased or improved using amounts provided under a qualified tribal school modernization bond issued under this section shall be mortgaged or used as collateral for the bond.CommentsClose CommentsPermalink





(h) Sale of Bonds- A qualified tribal school modernization bond may be sold at a purchase price equal to, in excess of, or at a discount from the par amount of the bond.CommentsClose CommentsPermalink





(i) Treatment of Trust Agreement Earnings- Amounts earned through the investment of funds under the control of a trustee under a trust agreement described in subsection (d) shall not be subject to Federal income tax.CommentsClose CommentsPermalink





(j) Investment of Sinking Funds- Any sinking fund established for the purpose of the payment of principal on a qualified tribal school modernization bond shall be invested in--CommentsClose CommentsPermalink





(1) obligations issued or guaranteed by the United States; orCommentsClose CommentsPermalink





(2) such other assets as the Secretary of the Treasury may allow, by regulation.CommentsClose CommentsPermalink

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:CommentsClose CommentsPermalink

`Subchapter Z--Tribal School Modernization Provisions

`Sec. 1400U. Credit to holders of qualified tribal school modernization bonds.CommentsClose CommentsPermalink

`SEC. 1400U. 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.CommentsClose CommentsPermalink





`(b) Amount of Credit-CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(2) ANNUAL CREDIT- The annual credit determined with respect to any qualified tribal school modernization bond is the product of--CommentsClose CommentsPermalink





`(A) the applicable credit rate, multiplied byCommentsClose CommentsPermalink





`(B) the outstanding face amount of the bond.CommentsClose CommentsPermalink





`(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 date of sale of the issue) on outstanding long-term corporate obligations of similar ratings (as determined by the Secretary).CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(c) Limitation Based on Amount of Tax-CommentsClose CommentsPermalink





`(1) IN GENERAL- The credit allowed under subsection (a) for any taxable year shall not exceed the excess of--CommentsClose CommentsPermalink





`(A) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, overCommentsClose CommentsPermalink





`(B) the sum of the credits allowable under part IV of subchapter A (other than subpart C thereof, relating to refundable credits).CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(d) Qualified Tribal School Modernization Bond; Other Definitions- For purposes of this section--CommentsClose CommentsPermalink





`(1) QUALIFIED TRIBAL SCHOOL MODERNIZATION BOND-CommentsClose CommentsPermalink





`(A) IN GENERAL- The term `qualified tribal school modernization bond' means, subject to subparagraph (B), any bond issued as part of an issue under section 2(c) of the Indian School Construction Act, as in effect on the date of enactment of this section, if--CommentsClose CommentsPermalink





`(i) 95 percent or more of the proceeds of such issue are to be used for the construction, rehabilitation, or repair of a school facility funded by the Bureau of Indian Affairs of the Department of the Interior or for the acquisition of land on which such a facility is to be constructed with part of the proceeds of such issue,CommentsClose CommentsPermalink





`(ii) the bond is issued by an Indian tribe,CommentsClose CommentsPermalink





`(iii) the issuer designates such bond for purposes of this section, andCommentsClose CommentsPermalink





`(iv) the term of each bond which is part of such issue does not exceed 15 years.CommentsClose CommentsPermalink





`(B) NATIONAL LIMITATION ON AMOUNT OF BONDS DESIGNATED-CommentsClose CommentsPermalink





`(i) NATIONAL LIMITATION- There is a national qualified tribal school modernization bond limitation for each calendar year. Such limitation is--CommentsClose CommentsPermalink





`(I) $200,000,000 for 2007,CommentsClose CommentsPermalink





`(II) $200,000,000 for 2008, andCommentsClose CommentsPermalink





`(III) $200,000,000 for 2009.CommentsClose CommentsPermalink





`(ii) ALLOCATION OF LIMITATION- The national qualified tribal school modernization bond limitation shall be allocated to Indian tribes by the Secretary of the Interior subject to the provisions of section 2 of the Indian School Construction Act, as in effect on the date of enactment of this section.CommentsClose CommentsPermalink





`(iii) DESIGNATION SUBJECT TO LIMITATION AMOUNT- The maximum aggregate face amount of bonds issued during any calendar year which may be designated under subsection (d)(1) with respect to any Indian tribe shall not exceed the limitation amount allocated to such government under clause (ii) for such calendar year.CommentsClose CommentsPermalink





`(iv) CARRYOVER OF UNUSED LIMITATION- If for any calendar year--CommentsClose CommentsPermalink





`(I) the limitation amount under this subparagraph, exceedsCommentsClose CommentsPermalink





`(II) the amount of qualified tribal school modernization bonds issued during such year, the limitation amount under this subparagraph for the following calendar year shall be increased by the amount of such excess. The preceding sentence shall not apply if such following calendar year is after 2010.CommentsClose CommentsPermalink





`(2) CREDIT ALLOWANCE DATE- The term `credit allowance date' means--CommentsClose CommentsPermalink





`(A) March 15,CommentsClose CommentsPermalink





`(B) June 15,CommentsClose CommentsPermalink





`(C) September 15, andCommentsClose CommentsPermalink





`(D) December 15.CommentsClose CommentsPermalink





Such term includes the last day on which the bond is outstanding.CommentsClose CommentsPermalink





`(3) BOND- The term `bond' includes any obligation.CommentsClose CommentsPermalink





`(4) INDIAN TRIBE- The term `Indian tribe' has the meaning given the term `Indian tribal government' by section 7701(a)(40), including the application of section 7871(d). Such term includes any consortium of Indian tribes approved by the Secretary of the Interior.CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(g) Credits May Be Stripped- Under regulations prescribed by the Secretary--CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(k) Reporting- Issuers of qualified tribal school modernization bonds shall submit reports similar to the reports required under section 149(e).'.CommentsClose CommentsPermalink

SEC. 5. ADDITIONAL PROVISIONS.

(a) Sovereign Immunity- Nothing in this Act or an amendment made by this Act impacts, limits, or otherwise affects the sovereign immunity of the United States or any State or Indian tribal government.CommentsClose CommentsPermalink





(b) Application- This Act and the amendments made by this Act shall take effect on the date of enactment of this Act with respect to bonds issued after December 31, 2006, regardless of the status of regulations promulgated pursuant to this Act or an amendment made by this Act.CommentsClose CommentsPermalink