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SEC. 15. COMPLIANCE WITH DAVIS -BACON ACT.

NIC shall take such action as may be necessary to ensure that projects assisted in whole or in part under the provisions of this Act shall incorporate a provision requiring in any contract relating to any construction, reconstruction, rehabilitation, replacement, or expansion of such project, that not less than the wages prevailing in the locality, as predetermined by the Secretary of Labor pursuant to the Act of March 3, 1931 (40 U.S.C. 276a; commonly referred to as the `Davis -Bacon Act') shall be paid to all laborers and mechanics employed to perform such contracts.

SEC. 16. OBLIGATIONS NOT FEDERALLY GUARANTEED; STATE LAWS.

(a) STATUS OF SECURITIES-

(1) NO FULL FAITH AND CREDIT OF THE U.S- Obligations of the Corporation or the Insurance Corporation, and obligations insured by any such corporation shall not be obligations of, or guaranteed as to principal or interest by, the United

States or any agency of the United States and the obligations shall so plainly state.

(2) FINANCING NOT TREATED AS U.S. GUARANTEE- The provision of assistance of any kind or nature from NIC shall not be treated as a direct or indirect guarantee of any payment of principal or interest on any security by the United States for purposes of section 149(b) of the Internal Revenue Code of 1986 or any other law.

(b) STATE LAWS- The receipt by any entity of any assistance under this Act, directly or indirectly, and any financial assistance provided by any governmental entity in connection with such assistance under this Act shall be valid and lawful notwithstanding any State or local restrictions regarding extensions of credit or other benefits to private persons or entities, or other similar restrictions.

SEC. 17. AUDITS; REPORTS TO THE PRESIDENT AND THE CONGRESS.

(a) ACCOUNTING- The books of account of NIC shall be maintained in accordance with generally accepted accounting principles and shall be subject to an annual audit by independent public accountants of nationally recognized standing.

(b) REPORTS- NIC shall submit to the President and the Congress, within 90 days after the end of each fiscal year, a complete and detailed report with respect to the preceding fiscal year, setting forth--

(1) a summary of NIC's operations, for such preceding fiscal year;

(2) NIC's financial statements and the opinion with respect thereto prepared by the independent public accountant reviewing such statements and a copy of any report made on an audit conducted under subsection (a) of this section;

(3) a schedule of NIC's obligations and capital securities outstanding at the end of such fiscal year, with a statement of the amounts issued and redeemed or paid during such fiscal year; and

(4) the status of projects receiving funding or other assistance pursuant to this Act, including disclosure of all entities with a development, ownership, or operational interest in such projects.

(c) BOOKS AND RECORDS-

(1) IN GENERAL- NIC shall maintain adequate books and records to support the financial transactions of the Corporation, the Insurance Corporation, and subsidiaries of such corporations.

(2) AUDITS BY THE SECRETARY AND GAO- The books and records of NIC shall be maintained in accordance with recommended accounting practices and shall be open to inspection by the Secretary and the Comptroller General of the United States.

SEC. 18. TAX TREATMENT OF DISTRIBUTIONS FROM QUALIFIED RETIREMENT PLANS INVESTING IN PUBLIC BENEFIT BONDS.

(a) IN GENERAL- Section 72 of the Internal Revenue Code of 1986 (relating to annuities; certain proceeds of endowment and life insurance contracts) is amended by redesignating subsection (w) as subsection (x) and by inserting after subsection (v) the following new subsection:

`(w) TREATMENT OF DISTRIBUTION FROM QUALIFIED RETIREMENT PLANS INVESTING IN PUBLIC BENEFIT BONDS-

`(1) IN GENERAL- In the case of any qualified retirement plan which receives directly or indirectly any interest on any public benefit bond (including any payments in respect thereof made by a surety or guarantor) for purposes of applying this section to any distribution from such plan, the distributee's investment in the contract shall be treated as including such distributee's allocable share of such interest under the terms of the qualified retirement plan, and any such distribution shall be treated as a distribution described in subsection (e)(2)(B) in which the distribution is allocable first to the investment in the contract attributable to such interest.

`(2) TREATMENT OF INSTALLMENTS- In the case of a distribution to be made over more than one calendar year, the amount of public benefit bond interest to be taken into account with respect to a given calendar year shall be the aggregate amount of such interest allocable to the distributee as of the end of the prior calendar year. With respect to the final calendar year, the amount of public benefit bond interest to be taken into account shall include the amount of such interest received by the plan during such year that is allocable to the plan participant with respect to whom the distribution is made.

`(3) PUBLIC BENEFIT BOND- For purposes of this subsection, the term `public benefit bond' means any obligation issued after the date of the enactment of this subsection if--

`(A) 95 percent or more of the net proceeds of such obligation are used in connection with the financing or refinancing of 1 or more infrastructure facilities,

`(B) such obligation has received a published rating, and

`(C) the development of such infrastructure facilities have been or will be undertaken by a governmental entity or public-private partnership,

as such terms are defined in section 4 of the National Infrastructure Development Act of 1997.

`(4) CERTIFICATION OF INFRASTRUCTURE FACILITIES- An issuer of an obligation of which 95 percent or more of the net proceeds are to be used in connection with the financing or refinancing of 1 or more facilities may apply to the National Infrastructure Development Corporation, in accordance with such procedures as such corporation may establish, for certification that any such facility is an infrastructure facility (as defined in section 4 of the National Infrastructure Development Act of 1997). Certification by the Corporation shall create a presumption of such status, but shall not be binding on the Secretary.

`(5) LEGEND REQUIRED- No obligation shall be a public benefit bond for purposes of this subsection unless it is designated as intended to be a public benefit bond on the date of issuance and bears a legend to such effect.

`(6) QUALIFIED RETIREMENT PLAN- For purposes of this subsection, the term `qualified retirement plan' means--

`(A) a qualified retirement plan (as defined in section 4974(c)), and

`(B) an eligible deferred compensation plan (as defined in section 457(b)).

`(7) TREATMENT OF DIVIDENDS FROM MUTUAL FUNDS-

`(A) IN GENERAL- For purposes of this subsection, in the case of any dividend (other than a dividend described in section 854(a)) received from a regulated investment company which meets the requirements of section 852 for the taxable year in which it paid the dividend--

`(i) the entire amount of such dividend shall be treated as interest on a public benefit bond if the aggregate interest on such bonds received by such company during the taxable year equals or exceeds 75 percent of its gross income, or

`(ii) if clause (i) does not apply, a portion of such dividend shall be treated as interest on a public benefit bond based on the portion of the company's gross income which consists of such interest.

`(B) NOTICE TO SHAREHOLDERS- The amount of any distribution by a regulated investment company which may be taken into account as interest on a public benefit bond for purposes of this section shall not exceed the amount so designated by the company in a written notice to its shareholders mailed not later than 45 days after the close of its taxable year.

`(C) GROSS INCOME- For purposes of this section, the term `gross income' does not include gain from the sale or other disposition of stock or securities.'.

(b) CONFORMING AMENDMENTS-

(1) Subsection (w) of section 72 of the Internal Revenue Code of 1986 is amended by adding the following new paragraph:

`(4) TREATMENT OF QUALIFYING PUBLIC BENEFIT BOND INTEREST- For purposes of subsections (c)(1)(A) and (c)(2)(A), the total amount of public benefit bond interest described in subsection (w) with respect to a participant in a qualified retirement plan (determined without reference to the annuity starting date) shall be treated as an investment in the contract.'.

(c) EFFECTIVE DATE- The amendment made this section shall apply to distributions after the date of the enactment of this Act.

SEC. 19. AUTHORIZATIONS.

(a) APPROPRIATIONS AUTHORIZED FOR ESTABLISHMENT- There are hereby authorized to be appropriated to the Secretary $30,000,000 for the purpose of facilitating the NIC's initial operations.

(b) APPROPRIATIONS AUTHORIZED FOR CONDUCT OF BUSINESS OF NIC- There are authorized to be appropriated to the Secretary $1,000,000,000 for each of the fiscal years 2000 through 2003 to make the capital contributions in accordance with section 9(a)(1)(A) for the purpose of carrying out this Act.

(c) ESTABLISHMENT OF NIC ACCOUNT- Before the transition date, the funds appropriated under subsection (b) shall be deposited in an account to be established in the Treasury of the United States to be known as the `National Infrastructure Development Corporation Account', which shall be available to the Corporation, without need for further appropriation and without fiscal year limitation, for carrying out its purposes, functions and powers, including the investment and reinvestment of these funds as permitted in this Act, and which shall not be subject to apportionment under subchapter II of chapter 15 of title 31. The Secretary of the Treasury, in consultation with the board of directors of the Corporation, shall invest amounts in the account in public debt securities with maturities suitable to the needs of the account and bearing interest at rates determined by the Secretary, taking into consideration current market yields on outstanding marketable obligations of the United States of comparable maturities.

SEC. 20. PROHIBITION ON ADDITIONAL FEDERAL ASSISTANCE.

Except as otherwise specifically provided by sections 13 and 19, NIC shall receive no appropriations, loans, or other financial assistance from the Federal Government.

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