[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2919 Introduced in Senate (IS)]
2d Session
S. 2919
To amend the Internal Revenue Code of 1986 to provide funding for
Indian tribal prison facilities, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 7, 2004
Mr. Baucus (for himself and Mr. Daschle) 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 provide funding for
Indian tribal prison facilities, 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. CREDIT TO HOLDERS OF INDIAN TRIBAL PRISON FACILITY BONDS.
(a) In General.--Part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to credits against tax) is
amended by adding at the end the following new subpart:
``Subpart H--Nonrefundable Credit for Holders of Indian Tribal Prison
Facility Bonds
``Sec. 54. Credit to holders of Indian
tribal prison facility bonds.
``SEC. 54. CREDIT TO HOLDERS OF INDIAN TRIBAL PRISON FACILITY BONDS.
``(a) Allowance of Credit.--In the case of a taxpayer who holds an
Indian tribal prison facility 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 Indian tribal prison
facility bond is the amount equal to the product of--
``(A) the credit rate determined by the Secretary
under paragraph (2) for the month in which such bond
was issued, multiplied by
``(B) the face amount of the bond held by the
taxpayer on the credit allowance date.
``(2) Determination.--During each calendar month, the
Secretary shall determine a credit rate which shall apply to
bonds issued during the following calendar month. The credit
rate for any month is the percentage which the Secretary
estimates will permit the issuance of Indian tribal prison
facility bonds without discount and without interest cost to
the issuer.
``(c) Limitation Based on Amount of Tax.--The credit allowed under
subsection (a) for any taxable year shall not exceed the excess of--
``(1) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(2) the sum of the credits allowable under this part
(other than this subpart and subpart C).
``(d) 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.
``(e) Indian Tribal Prison Facility Bond.--For purposes of this
part, the term `Indian tribal prison facility bond' means any bond
issued as part of an issue if--
``(1) 95 percent or more of the proceeds of such issue are
to be invested in investment grade obligations and the proceeds
from such investment are used for the construction,
acquisition, rehabilitation, expansion, or operating expanses
of a qualified Indian tribal prison facility,
``(2) the bond is issued by the Indian tribe within the
jurisdiction of which such facility is located,
``(3) the bond is issued pursuant to a plan developed by
the Indian tribe,
``(4) the issuer designates such bond for purposes of this
section,
``(5) the term of each bond which is part of such issue
does not exceed 10 years, and
``(6) no amount of proceeds of such issue (including
proceeds from any investment under paragraph (1)) may be used
to pay the costs of issuance to the extent such amount exceeds
2 percent of the sale proceeds of such issue.
``(f) Qualified Indian Tribal Prison Facility.--For purposes of
this section, the term `qualified Indian tribal prison facility' means
any residential correctional or detention facility located on the
qualified Indian land of the issuing Indian tribe substantially all of
the inmates of which are adult or juvenile members of such Indian
tribe.
``(g) Limitation on Amount of Bonds Designated; Allocation of
Bonds.--
``(1) National limitation.--There is an Indian tribal
prison facility bond limitation for each calendar year. Such
limitation is--
``(A) $200,000,000 for 2005,
``(B) $200,000,000 for 2006,
``(C) $200,000,000 for 2007, and
``(D) except as provided in paragraph (3), zero
thereafter.
``(2) Allocation of bonds.--
``(A) In general.--The Secretary, after
consultation with the Secretary of the Interior, shall
allocate the Indian tribal prison facility bond
limitation among those Indian tribes which submit a
plan which contains a description of the proposed use
of investment proceeds, assurances that such proceeds
will be used only for such use, a proposed expenditure
schedule, information relevant to the criteria
described in subparagraph (B), and any other
information determined appropriate by the Secretary.
``(B) Approval criteria.--In allocating the
limitation among plan requests of Indian tribes under
subparagraph (A), the Secretary shall consider--
``(i) the percentage of prison overcrowding
in excess of the facility occupancy level as
determined by the Bureau of Indian Affairs,
``(ii) the condition of existing
facilities,
``(iii) the health and safety of both
inmates and prison employees,
``(iv) the type of offenders incarcerated,
and
``(v) other financial resources available
to the Indian tribe.
``(3) Carryover of unused issuance limitation.--If for any
calendar year the limitation amount imposed by paragraph (1)
exceeds the amount of Indian tribal prison facility bonds
issued during such year, such excess shall be carried forward
to one or more succeeding calendar years as an addition to the
limitation imposed by paragraph (1) and until used by issuance
of such bonds.
``(h) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Credit allowance date.--The term `credit allowance
date' means, with respect to any issue, the last day of the 1-
year period beginning on the date of the issuance of such issue
and the last day of each successive 1-year period thereafter.
``(2) Bond.--The term `bond' includes any obligation.
``(3) Indian tribe.--The term `Indian tribe' has the
meaning given such term by section 7871(c)(3)(E)(ii).
``(4) Qualified indian lands.--The term `qualified Indian
lands' has the meaning given such term by section
7871(c)(3)(E)(i).
``(5) Partnership; s corporation; and other pass-thru
entities.--In the case of a partnership, trust, S corporation,
or other pass-thru entity, rules similar to the rules of
section 41(g) shall apply with respect to the credit allowable
under subsection (a).
``(6) Bonds held by regulated investment companies.--If any
Indian tribal prison facility 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.
``(7) Reporting.--Each Indian tribe with an allocation of
Indian tribal prison facility bonds under an approved plan
shall submit reports similar to the reports required under
section 149(e).''.
(b) Conforming Amendments.--
(1) Reporting.--Subsection (d) of section 6049 of the
Internal Revenue Code of 1986 (relating to returns regarding
payments of interest) is amended by adding at the end the
following new paragraph:
``(8) Reporting of credit on indian tribal prison facility
bonds.--
``(A) In general.--For purposes of subsection (a),
the term `interest' includes amounts includible in
gross income under section 54(d) and such amounts shall
be treated as paid on the credit allowance date (as
defined in section 54(h)(1)).
``(B) Reporting to corporations, etc.--Except as
otherwise provided in regulations, in the case of any
interest described in subparagraph (A), subsection
(b)(4) shall be applied without regard to subparagraphs
(A), (H), (I), (J), (K), and (L)(i) of such subsection.
``(C) Regulatory authority.--The Secretary may
prescribe such regulations as are necessary or
appropriate to carry out the purposes of this
paragraph, including regulations which require more
frequent or more detailed reporting.''.
(2) Treatment for estimated tax purposes.--
(A) Individual.--Section 6654 of such Code
(relating to failure by individual to pay estimated
income tax) is amended by redesignating subsection (m)
as subsection (n) and by inserting after subsection (l)
the following new subsection:
``(m) Special Rule for Holders of Indian Tribal Prison Facility
Bonds.--For purposes of this section, the credit allowed by section 54
to a taxpayer by reason of holding an Indian tribal prison facility
bond on a credit allowance date shall be treated as if it were a
payment of estimated tax made by the taxpayer on such date.''.
(B) Corporate.--Subsection (g) of section 6655 of
such Code (relating to failure by corporation to pay
estimated income tax) is amended by adding at the end
the following new paragraph:
``(5) Special rule for holders of indian tribal prison
facility bonds.--For purposes of this section, the credit
allowed by section 54 to a taxpayer by reason of holding an
Indian tribal prison facility bond on a credit allowance date
shall be treated as if it were a payment of estimated tax made
by the taxpayer on such date.''.
(c) Clerical Amendments.--
(1) The table of subparts for 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:
``Subpart H. Nonrefundable Credit for
Holders of Indian Tribal Prison
Facility Bonds.''.
(2) Section 6401(b)(1) of such Code is amended by striking
``and G'' and inserting ``G, and H''.
(d) Effective Date.--The amendments made by this section shall
apply to obligations issued after December 31, 2004.
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