(a) (1) In this section, the following words have the meanings indicated.
(2) "Bonds" means bonds, notes, or other evidences of obligation
issued by the Department, including both consolidated transportation
bonds and county transportation bonds.
(3) "Code" means the Internal Revenue Code and includes regulations
and rulings issued under that Code.
(4) "Proceeds" means moneys received from the sale of the
Department's bonds, and includes any moneys deemed to be proceeds of
the Department's bonds under the Code.
(b) The Secretary, the Treasurer, and the Comptroller shall establish and
maintain funds and accounts for the administration, management,
investment, and accounting of proceeds, including any investment
earnings on proceeds, that may be necessary or appropriate from time to
time to comply with the Code and to establish or maintain the exclusion
from gross income for federal income tax purposes of interest on the
Department's bonds.
(c) (1) The Secretary and the Treasurer shall manage and invest proceeds,
including any investment earnings on proceeds, in a manner so as to
maintain the exclusion from gross income for federal income tax
purposes of interest on the Department's bonds.
(2) The Secretary and the Treasurer shall restrict the yields on
investments of proceeds if and to the extent necessary to maintain the
exclusion from gross income for federal income tax purposes of interest
on the Department's bonds.
(d) The Secretary, the Treasurer, and the Comptroller shall prepare and
maintain records of the receipt, deposit, investment, management,
disbursement, and application of proceeds, including any investment
earnings on proceeds, that may be necessary or appropriate from time to
time to comply with the Code and to maintain or verify the exclusion
from gross income for federal income tax purposes of interest on the
Department's bonds.
(e) (1) The Secretary, the Treasurer, and the Comptroller shall establish a
separate rebate fund to be used to make any payments to the United
States with respect to investment earnings on proceeds that may be
required from time to time by the Code.
(2) There may be separate accounts within the rebate fund.
(3) Amounts deposited to the rebate fund shall be used only for the purpose
of making rebate payments to the United States.
(4) The Secretary, the Treasurer, and the Comptroller shall make payments
from the rebate fund as may be required from time to time in order to
comply with the Code and to maintain the exclusion from gross income
for federal income tax purposes of interest on the Department's bonds.
(5) Any excess moneys held in the rebate fund with respect to an issue of
the Department's bonds after all required rebate payments for that
issue have been made, as certified by the Secretary and the Treasurer,
shall be applied in compliance with the Code.
(f) The Secretary, the Treasurer, and the Comptroller shall prepare and
file from time to time with the appropriate agency of the United States
any forms, information, and reports with respect to the Department's
bonds and the expenditure and investment of proceeds that may be
required under the Code.
(g) As necessary or appropriate from time to time to comply with the Code
and to establish or maintain the exclusion from gross income for
federal income tax purposes of interest on the Department's bonds, the
Secretary, the Treasurer, and the Comptroller shall each:
(1) Take any other or further actions;
(2) Enter into any agreement or covenant regarding the use of proceeds,
including any investment earnings on proceeds, the deposit of moneys to
the rebate fund and the making of rebate payments; and
(3) Provide certifications of facts and estimates.
(h) This section does not prevent the Board of Public Works and the
Department from authorizing the issuance and sale of the Department's
bonds the interest on which is not excludable from gross income for
federal income tax purposes.
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