A bill to amend the Internal Revenue Code of 1986 to establish COVID Recovery Bonds, and for other purposes.

II 116TH CONGRESS 2D SESSION S. 4754 To amend the Internal Revenue Code of 1986 to establish COVID Recovery Bonds, and for other purposes. IN THE SENATE OF THE UNITED STATES SEPTEMBER 29, 2020 Mr. PERDUE (for himself and Mr. CASSIDY) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to establish COVID Recovery Bonds, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. COVID RECOVERY BONDS. 3 (a) IN GENERAL.—Chapter 1 of the Internal Rev- 4 enue Code of 1986 is amended by inserting after sub- 5 chapter V the following new subchapter: 6 ‘‘Subchapter W—COVID Recovery Bonds 7 ‘‘Sec. 1400. COVID Recovery Bonds. VerDate Sep 11 2014 20:25 Oct 19, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\S4754.IS S4754 khammond on DSK30NT082PROD with BILLS 2 •S 4754 IS ‘‘SEC. 1400. COVID RECOVERY BONDS. 1 ‘‘(a) IN GENERAL.—For purposes of this title, any 2 qualified COVID recovery bond shall be treated as an ex- 3 empt facility bond. 4 ‘‘(b) QUALIFIED COVID RECOVERY BOND.—For 5 purposes of this section, the term ‘qualified COVID recov- 6 ery bond’ means any bond issued as part of an issue if— 7 ‘‘(1) 95 percent or more of the net proceeds (as 8 defined in section 150(a)(3)) of such issue are to be 9 used for qualified project costs, 10 ‘‘(2) such bond is designated by the State for 11 purposes of this section by— 12 ‘‘(A) in the case of a bond which is re- 13 quired under State law to be approved by the 14 bond commission of such State, such bond com- 15 mission, and 16 ‘‘(B) in the case of any other bond, the 17 Governor of such State, and 18 ‘‘(3) no portion of the proceeds of such issue is 19 to be used to provide any property described in sec- 20 tion 144(c)(6)(B). 21 ‘‘(c) LIMITATIONS ON BONDS.—The maximum ag- 22 gregate face amount of bonds which may be designated 23 under this section with respect to any State shall not ex- 24 ceed the amount of the national COVID recovery bond 25 limitation allocated to such State under subsection (g). 26 VerDate Sep 11 2014 20:25 Oct 19, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4754.IS S4754 khammond on DSK30NT082PROD with BILLS 3 •S 4754 IS ‘‘(d) QUALIFIED PROJECT COSTS.—For purposes of 1 this section, the term ‘qualified project costs’ means the 2 cost of acquisition, construction, reconstruction, and ren- 3 ovation of any qualified facility located in the State which 4 designated the bonds under subsection (b)(2). 5 ‘‘(e) QUALIFIED FACILITY.—For purposes of this 6 section, the term ‘qualified facility’ means— 7 ‘‘(1) any facility described in section 142(a) 8 (with the exception of any facility described in para- 9 graph (7) of such section), and 10 ‘‘(2) any facility to provide electric energy or 11 gas, including facilities for the generation, manufac- 12 turing, storage, transportation, or processing of elec- 13 tricity or gas. 14 ‘‘(f) SPECIAL RULES.—In applying this title to any 15 qualified COVID recovery bond, the following modifica- 16 tions shall apply: 17 ‘‘(1) Section 146 (relating to volume cap) shall 18 not apply. 19 ‘‘(2) Section 147(d) (relating to acquisition of 20 existing property not permitted) shall be applied by 21 substituting ‘50 percent’ for ‘15 percent’ in each 22 place it appears. 23 ‘‘(3) Section 148(f)(4)(C) (relating to exception 24 from rebate for certain proceeds to be used to fi- 25 VerDate Sep 11 2014 20:25 Oct 19, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4754.IS S4754 khammond on DSK30NT082PROD with BILLS 4 •S 4754 IS nance construction expenditures) shall apply to the 1 available construction proceeds of bonds which are 2 part of an issue described in subsection (b). 3 ‘‘(4) Section 57(a)(5) (relating to tax-exempt 4 interest) shall not apply. 5 ‘‘(g) ALLOCATIONS.— 6 ‘‘(1) IN GENERAL.— 7 ‘‘(A) GENERAL ALLOCATION.—The Sec- 8 retary shall allocate the national COVID recov- 9 ery bond limitation among the States in the 10 proportion that each such State’s 2020 popu- 11 lation bears to the aggregate 2020 population 12 for all of the States. 13 ‘‘(B) MINIMUM ALLOCATION.—The Sec- 14 retary shall adjust the allocations under sub- 15 paragraph (A) for each State to the extent nec- 16 essary to ensure that no State receives less than 17 0.9 percent of the national COVID recovery 18 bond limitation. 19 ‘‘(2) NATIONAL LIMITATIONS.—There is a na- 20 tional COVID recovery bond limitation of 21 $40,000,000,000.’’. 22 (b) CLERICAL AMENDMENT.—The table of sub- 23 chapters for chapter 1 of the Internal Revenue Code of 24 VerDate Sep 11 2014 20:25 Oct 19, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4754.IS S4754 khammond on DSK30NT082PROD with BILLS 5 •S 4754 IS 1986 is amended by inserting after the item relating to 1 subchapter V the following new item: 2 ‘‘SUBCHAPTER W—COVID RECOVERY BONDS’’. (c) EFFECTIVE DATE.—The amendments made by 3 this section shall apply to obligations issued after the date 4 of the enactment of this Act. 5 SEC. 2. TAX-EXEMPT FINANCING OF QUALIFIED GOVERN- 6 MENT BUILDINGS. 7 (a) IN GENERAL.—Section 142(a) of the Internal 8 Revenue Code of 1986 is amended by striking ‘‘or’’ at the 9 end of paragraph (14), by striking the period at the end 10 of paragraph (15) and inserting ‘‘, or’’, and by adding at 11 the end the following new paragraph: 12 ‘‘(16) qualified government buildings.’’. 13 (b) QUALIFIED GOVERNMENT BUILDINGS.—Section 14 142 of the Internal Revenue Code of 1986 is amended by 15 adding at the end the following new subsection: 16 ‘‘(n) QUALIFIED GOVERNMENTAL BUILDINGS.— 17 ‘‘(1) IN GENERAL.—For purposes of subsection 18 (a)(16), the term ‘qualified governmental buildings’ 19 means any building or facility that consists of one 20 or more of the following: 21 ‘‘(A) An elementary school or a secondary 22 school (within the meanings given such terms 23 by section 14101 of the Elementary and Sec- 24 ondary Education Act of 1965 (20 U.S.C. 25 VerDate Sep 11 2014 20:25 Oct 19, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S4754.IS S4754 khammond on DSK30NT082PROD with BILLS 6 •S 4754 IS 8801), as in effect on the date of the enactment 1 of this subsection). 2 ‘‘(B) A facility of a State college or univer- 3 sity used for educational purposes. 4 ‘‘(C) A library maintained for, and open 5 to, the general public. 6 ‘‘(D) A court of law. 7 ‘‘(E) A hospital or health care facility. 8 ‘‘(F) A laboratory or research facility used 9 by a governmental unit. 10 ‘‘(G) A public safety facility (including po- 11 lice, fire, enhanced 911, emergency or disaster 12 management, and ambulance or emergency 13 medical service facilities and jails and correc- 14 tional facilities). 15 ‘‘(H) An office for employees of a govern- 16 mental unit. 17 Such term shall include any equipment, functionally 18 related and subordinate facility, or land (and any 19 real property rights appurtenant thereto) with re- 20 spect to any such building or facility. 21 ‘‘(2) SPECIFICALLY EXCLUDED FACILITIES.— 22 Such term shall not include— 23 ‘‘(A) a building or facility the primary pur- 24 pose of which is one of the following: retail food 25 VerDate Sep 11 2014 20:25 Oct 19, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4754.IS S4754 khammond on DSK30NT082PROD with BILLS 7 •S 4754 IS and beverage services, or the provision of recre- 1 ation or entertainment, or 2 ‘‘(B) any building or facility that includes 3 any of the following: any private or commercial 4 golf course, country club, massage parlor, ten- 5 nis club, skating facility (including roller skat- 6 ing, skateboard, and ice skating), racquet 7 sports facility (including any handball or 8 racquetball court), hot tub facility, suntan facil- 9 ity, racetrack, convention center, or sports sta- 10 dium or arena. 11 ‘‘(3) OFFICE SPACE.—Subsection (b)(2) shall 12 not apply with respect to any qualified governmental 13 building. 14 ‘‘(4) NO DEPRECIATION OR INVESTMENT CRED- 15 IT.—No depreciation, amortization, or business cred- 16 it under section 38 shall be allowed with respect to 17 any facility described in subsection (a)(16) which 18 has been financed by the net proceeds of the issue.’’. 19 (c) GOVERNMENTALLY OWNED REQUIREMENT.— 20 Section 142(b)(1)(A) of the Internal Revenue Code of 21 1986 is amended by striking ‘‘or (12)’’ and inserting 22 ‘‘(12), or (16)’’. 23 (d) EXEMPTION FROM VOLUME CAP ON PRIVATE 24 ACTIVITY BONDS.—Section 146(g)(3) of the Internal Rev- 25 VerDate Sep 11 2014 20:25 Oct 19, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4754.IS S4754 khammond on DSK30NT082PROD with BILLS 8 •S 4754 IS enue Code of 1986 is amended by striking ‘‘or (15)’’ and 1 inserting ‘‘(15), or (16)’’. 2 (e) EFFECTIVE DATE.—The amendments made by 3 this section shall apply to bonds issued after the date of 4 the enactment of this Act. 5 Æ VerDate Sep 11 2014 20:25 Oct 19, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\S4754.IS S4754 khammond on DSK30NT082PROD with BILLS