S.Amdt. 524

SA 524. Mr. JOHNSON submitted an amendment intended to be proposed to
amendment SA 98 proposed by Mr. Inouye (for himself and Mr. Baucus) to
the bill H.R. 1, making supplemental appropriations for job
preservation and creation, infrastructure investment, energy efficiency
and science, assistance to the unemployed, and State and local fiscal
stabilization, for fiscal year ending September 30, 2009, and for other
purposes; which was ordered to lie on the table; as follows:

On page 122, after line 23, add the following:

SEC. 7___. INDIAN SCHOOL CONSTRUCTION.

(a) Short Title.--This section may be cited as the ``Indian
School Construction Act''.
(b) Definitions.--In this section:
(1) Bureau.--The term ``Bureau'' means the Bureau of Indian
Affairs.
(2) Escrow account.--The term ``escrow account'' means the
Tribal School Modernization Escrow Account established under
subsection (c)(6)(B)(i)(I).
(3) Indian.--The term ``Indian'' means any individual who
is a member of an Indian tribe.
(4) Indian tribe.--
(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).
(B) Inclusion.--The term ``Indian tribe'' includes any
consortium of Indian tribes approved by the Secretary.
(5) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(6) Tribal school.--The term ``tribal school'' means an
elementary school, secondary school, or dormitory that--
(A) is operated by a tribal organization or the Bureau for
the education of Indian children; and
(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--
(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); or
(ii) the Tribally Controlled Schools Act of 1988 (25 U.S.C.
2501 et seq.).
(c) Issuance of Bonds.--
(1) 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.
(2) Eligibility.--
(A) In general.--To be eligible to issue a qualified tribal
school modernization bond under the program under paragraph
(1), an Indian tribe shall--
(i) prepare and submit to the Secretary a plan of
construction that meets the requirements of subparagraph (B);
(ii) provide for quarterly and final inspection by the
Bureau of each project to be funded by the bond; and
(iii) 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.

[[Page S1769]]

(B) Plan of construction.--The requirements referred to in
subparagraph (A)(i) are that the plan shall--
(i) contain a description of the construction to be carried
out using funds provided under a qualified tribal school
modernization bond;
(ii) demonstrate that a comprehensive survey has been
carried out regarding the construction needs of the
applicable tribal school;
(iii) contain assurances that funding under the bond will
be used only for the activities described in the plan;
(iv) 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; and
(v) contain any other reasonable and related information
that the Secretary determines to be appropriate.
(C) Priority.--In determining whether an Indian tribe is
eligible to participate in the program under this subsection,
the Secretary shall give priority to Indian tribes that, as
demonstrated by the plans of construction of the Indian
tribes, will fund projects--
(i) described in the list of the Bureau entitled
``Education Facilities Replacement Construction Priorities
List as of FY 2000'' (65 Fed. Reg. 4623) (or successor
regulations); or
(ii) 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.
(D) Advance planning and design funding.--
(i) 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 escrow account.
(ii) Conditions.--As a condition of receiving advance
planning and design funds from the escrow account under
clause (i), an Indian tribe shall agree--

(I) to issue qualified tribal school modernization bonds
after the date of receipt of the funds; and
(II) as a condition of each issuance of a bond, to deposit
into the escrow account or a fund managed by a trustee under
paragraph (4)(C) an amount equal to the amount of funds
received from the escrow account.

(3) Permissible activities.--In addition to the use
described in paragraph (1), an Indian tribe may use amounts
received through the issuance of a qualified tribal school
modernization bond--
(A) to enter into, and make payments under, contracts with
licensed and bonded architects, engineers, and construction
firms--
(i) to determine the needs of a tribal school; and
(ii) for the design and engineering of a tribal school;
(B) 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; and
(C) to carry out other such activities as the Secretary
determines to be appropriate.
(4) Bond trustee.--
(A) In general.--Notwithstanding any other provision of
law, any qualified tribal school modernization bond issued by
an Indian tribe under this subsection shall be subject to a
trust agreement between the Indian tribe and a trustee.
(B) Trustee.--Any bank or trust company that meets the
requirements established by the Secretary may serve as a
trustee for purposes of subparagraph (A).
(C) Content of trust agreement.--A trust agreement entered
into by an Indian tribe under this paragraph shall specify
that the trustee, with respect to any bond issued under this
subsection, shall--
(i) act as a repository for the proceeds of the bond;
(ii) make payments to bondholders;
(iii) receive, as a condition to the issuance of the bond,
a transfer of funds from the escrow account, 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
paragraph (10), will be sufficient to pay timely and in full
the entire principal amount of the bond on the stated
maturity date of the bond;
(iv) invest the funds received in accordance with clause
(iii); and
(v) 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 paragraph (3).
(D) Requirements for making direct payments.--
(i) In general.--Notwithstanding any other provision of
law, the trustee shall make each payment described in
subparagraph (C)(v) in accordance with such requirements as
the Indian tribe may prescribe in the trust agreement under
subparagraph (C).
(ii) Payments to contractors.--As a condition of making a
payment to a contractor under subparagraph (C)(v), the
trustee shall require an inspection of the project of the
contractor, to ensure the completion of the project, by--

(I) a local financial institution; or
(II) an independent inspecting architect or engineer.

(iii) Contracts.--Each contract under subparagraphs (A) and
(B) of paragraph (3) shall require, or be renegotiated to
require, that each payment under the contract shall be made
in accordance with this paragraph.
(5) Payments of principal and interest.--
(A) Principal.--
(i) In general.--No principal payment on any qualified
tribal school modernization bond shall be required until the
final, stated maturity of the bond.
(ii) Maturity.--

(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.
(II) Expiration.--On expiration of a qualified tribal
school modernization bond under subclause (I), the entire
outstanding principal under the bond shall become due and
payable.

(B) Interest.--In lieu of interest on a qualified tribal
school modernization bond, there shall be provided a tax
credit under section 1400V of the Internal Revenue Code of
1986.
(6) Bond guarantees.--
(A) In general.--Payment of the principal portion of a
qualified tribal school modernization bond issued under this
subsection shall be guaranteed solely by amounts deposited
with each respective bond trustee as described in paragraph
(4)(C)(iii).
(B) Escrow account.--
(i) In general.--Notwithstanding any other provision of
law, the Secretary--

(I) shall establish an escrow account, to be known as the
``Tribal School Modernization Escrow Account'';
(II) beginning in fiscal year 2010, may deposit in the
escrow account not more than $50,000,000 of amounts made
available for school replacement in the construction account
of the Bureau; and
(III) may accept for transfer into the escrow account
amounts from, as the Secretary determines to be appropriate--

(aa) other Federal departments and agencies (such as
amounts made available for facility improvement and repairs);
or
(bb) non-Federal public or private sources.
(ii) Transfers of excess proceeds.--The excess proceeds
held under any trust agreement that are not used for a
purpose described in clause (iii) or (v) of paragraph (4)(C)
shall be transferred periodically by the trustee for deposit
into the escrow account.
(iii) Payments.--The Secretary shall use any amounts
deposited in the escrow account under clause (i) or (ii) to
make payments--

(I) to trustees under paragraph (4); or
(II) under paragraph (2)(D).

(7) Limitations.--
(A) Obligation to repay.--
(i) In general.--Notwithstanding any other provision of
law, the principal amount of any qualified tribal school
modernization bond issued under this subsection shall be
repaid only to the extent of any escrowed funds provided
under paragraph (4)(C)(iii).
(ii) Treatment.--No qualified tribal school modernization
bond issued by an Indian tribe under this subsection shall be
an obligation of, and no payment of the principal of such a
bond shall be guaranteed by--

(I) the United States;
(II) an Indian tribe; or
(III) the tribal school for which the bond was issued.

(B) Land and facilities.--No land or facility purchased or
improved using amounts provided under a qualified tribal
school modernization bond issued under this subsection shall
be mortgaged or used as collateral for the bond.
(8) 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.
(9) Treatment of trust agreement earnings.--Amounts earned
through the investment of funds under the control of a
trustee under a trust agreement described in paragraph (4)
shall not be subject to Federal income tax.
(10) 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--
(A) obligations issued or guaranteed by the United States;
or
(B) such other assets as the Secretary of the Treasury may
allow, by regulation.
(d) 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:

``Subchapter Z--Tribal School Modernization Provisions

``Sec. 1400V. Credit to holders of qualified tribal school
modernization bonds

``SEC. 1400V. 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.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined
under this subsection with respect to any credit allowance
date for a

[[Page S1770]]

qualified tribal school modernization bond is 25 percent of
the annual credit determined with respect to such bond.
``(2) Annual credit.--The annual credit determined with
respect to any qualified tribal school modernization bond is
the product of--
``(A) the applicable credit rate, multiplied by
``(B) the outstanding face amount of the bond.
``(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).
``(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.
``(c) Limitation Based on Amount of Tax.--
``(1) In general.--The credit allowed under subsection (a)
for any taxable year shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under part IV of
subchapter A (other than subpart C thereof, relating to
refundable credits).
``(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.
``(d) Qualified Tribal School Modernization Bond; Other
Definitions.--For purposes of this section--
``(1) Qualified tribal school modernization bond.--
``(A) In general.--The term `qualified tribal school
modernization bond' means, subject to subparagraph (B), any
bond issued as part of an issue under subsection (c) of the
Indian School Construction Act, as in effect on the date of
the enactment of this section, if--
``(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,
``(ii) the bond is issued by an Indian tribe,
``(iii) the issuer designates such bond for purposes of
this section, and
``(iv) the term of each bond which is part of such issue
does not exceed 15 years.
``(B) National limitation on amount of bonds designated.--
``(i) National limitation.--There is a national qualified
tribal school modernization bond limitation for each calendar
year. Such limitation is--

``(I) $200,000,000 for 2009,
``(II) $200,000,000 for 2010, and
``(III) zero for 2011 and thereafter.

``(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 subsection (c) of the Indian
School Construction Act, as in effect on the date of the
enactment of this section.
``(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.
``(iv) Carryover of unused limitation.--If for any calendar
year--

``(I) the limitation amount under this subparagraph,
exceeds
``(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 2012.

``(2) Credit allowance date.--The term `credit allowance
date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and
``(D) December 15.
Such term includes the last day on which the bond is
outstanding.
``(3) Bond.--The term `bond' includes any obligation.
``(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.
``(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.
``(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.
``(g) 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.
``(h) 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.
``(i) Reporting.--Issuers of qualified tribal school
modernization bonds shall submit reports similar to the
reports required under section 149(e).''.
(e) Additional Provisions.--
(1) Sovereign immunity.--Nothing in this section or an
amendment made by this section impacts, limits, or otherwise
affects the sovereign immunity of the United States or any
State or Indian tribal government.
(2) Application.--This section and the amendments made by
this section shall take effect on the date of enactment of
this Act with respect to bonds issued after December 31,
2009, regardless of the status of regulations promulgated
pursuant to this section or an amendment made by this
section.
______