A FEDERAL HIGHWAY CORPORATION
The Committee finds it feasible to finance the needed improvements on the interstate network through a capitalization of appropriated funds in accordance with accepted financial principles, creating for this purpose a Federal Highway Corporation as an independent agency of the Government.
In the expenditure of funds provided for the interstate system, the Committee recommends that Congress provide legislation to guide the Corporation in allocating such funds in a manner which would reflect the needs of the system in the respective States as jointly determined by the Commissioner of Public Roads and the States, and finally certified by the Commissioner of Public Roads.
To accomplish its purposes, the Federal Highway Corporation should be empowered by the Congress among other things to issue bonds and utilize the proceeds therefrom for the following purposes:
1. For payments by the Corporation to the States of the cost of constructing projects on the interstate system and approved arterial connecting routes in urban areas; or payments of the cost of such projects undertaken by the Federal Government in the Federal domain;
2. To establish an appropriate credit to a State which has built subsequent to the date of designation of the interstate system or does build within the period 1955–64 with State funds, or funds of an agency under State highway department control, sections of the interstate system, toll or nontoll, m conformance with the prescribed design standards and other requirements which may be established by the Congress and the Corporation;
3. For necessary costs of administration, research, planning, and other purposes as authorized by the Congress;
4. To establish an advance revolving fund, if requested by any State highway department, to enable it to prosecute the program pending receipt of any payments described above.
Consideration might be given to authorizing the Corporation at the request of a State, to receive funds to be made available annually by the State to extend its bond issue thus capitalizing for the State its proposed annual expenditures on the interstate system. This might be helpful in those States with income insufficient to meet their matching requirements. It would require agreement as to rate of interest, security, and charges made by the Corporation for this service. Such agreement should be made only with the approval of the Treasury and then, only if possible without affecting the marketability and cost of the bond issue.
BOND ISSUES
The Corporation should be authorized to issue bonds, in an amount sufficient to meet its share of the costs to complete the interstate system during a construction period of 10 years, with maturity schedules, interest rates and other conditions determined by the Corporation with the approval of the Secretary of the Treasury. Similar authority would extend to issuance of other bonds under one of the State participating proposals referred to above. The bonds would be fully taxable.
