[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2330 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2330

 To authorize the Secretary of Transportation to make direct loans and 
provide lines of credit to finance surface transportation projects, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 31, 1997

 Ms. DeLauro (for herself, Mr. Green, Mr. Kennedy of Rhode Island, Mr. 
   Ford, Mr. Bonior, Mr. Frost, Mr. Olver, Ms. Christian-Green, Mr. 
  McGovern, and Ms. Pelosi) introduced the following bill; which was 
     referred to the Committee on Transportation and Infrastructure

_______________________________________________________________________

                                 A BILL


 
 To authorize the Secretary of Transportation to make direct loans and 
provide lines of credit to finance surface transportation projects, 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. SHORT TITLE.

    This Act may be cited as the ``Transportation Infrastructure Credit 
Act of 1997''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The economic vitality of the Nation and the quality of 
        life of its citizens depend upon continued investment in 
        surface transportation infrastructure for the movement of both 
        people and goods.
            (2) The Nation's needs for additional infrastructure 
        investment in both rural and urban areas exceed available 
        resources under traditional programs.
            (3) While recent Federal initiatives have equipped States 
        with new financing tools, large infrastructure projects of 
        national significance cannot be adequately funded through 
        existing programs and require new forms of assistance.
            (4) A capital investment program for constructing, 
        reconstructing, and expanding infrastructure will create both 
        direct and indirect jobs.
            (5) Improved surface access to seaports and airports 
        through investing in intermodal facilities and developing trade 
        corridors will stimulate exports and enhance the Nation's 
        competitiveness in the world economy.
            (6) Fostering public-private partnerships will attract 
        private capital and advance necessary projects through the 
        development stage.

SEC. 3. DEFINITIONS.

    In this Act, the following definitions apply:
            (1) Direct loan.--The term ``direct loan'' means any loan, 
        line of credit, or other similar Federal credit assistance 
        provided to an obligor in connection with the financing of a 
        project under section 5 or 6.
            (2) Eligible project cost.--The term ``eligible project 
        cost'' means all amounts paid by or for the account of an 
        obligor or insured in connection with a project, including--
                    (A) development phase activities, including 
                planning, feasibility analysis, environmental review, 
                permitting, preliminary engineering and design work, 
                and other preconstruction activities;
                    (B) construction, reconstruction, rehabilitation, 
                replacement, and acquisition of real property, and the 
                acquisition of equipment; and
                    (C) interest during construction, reasonably 
                required reserve funds, and issuance expenses.
            (3) Federal credit instrument.--The term ``Federal credit 
        instrument'' means a direct loan, loan guarantee, or line of 
        credit authorized to be made available under this Act with 
        respect to a project.
            (4) Insured.--The term ``insured'' means any party that is 
        the beneficiary of project development cost insurance under 
        section 7, whether a corporation, partnership, joint venture, 
        trust, or governmental entity or instrumentality, except that 
        if such entity is not a State or local government or any agency 
        thereof, the project it is undertaking shall be publicly 
        sponsored, as provided in paragraphs (1) and (2) of section 
        4(a).
            (5) Lender.--The term ``lender'' means any non-Federal 
        qualified institutional buyer (as defined in section 
        230.144A(a) of title 17, Code of Federal Regulations (or any 
        successor regulation), known as rule 144(a) of the Securities 
        and Exchange Commission and issued under the Securities Act of 
        1933 (15 U.S.C. 77a et seq.)), including--
                    (A) a qualified retirement plan (as defined in 
                section 4974(c) of the Internal Revenue Code of 1986) 
                that is a qualified institutional buyer; and
                    (B) a governmental plan (as defined in section 
                414(d) of the Internal Revenue Code of 1986) that is a 
                qualified institutional buyer.
            (6) Line of credit.--The term ``line of credit'' means a 
        commitment by the Secretary to make 1 or more direct loans at 
future dates subject to the occurrence of certain events.
            (7) Loan guarantee.--The term ``loan guarantee'' means any 
        guarantee or other pledge by the Secretary to pay all or a part 
        of the principal of and interest on a loan or other debt 
        obligation issued by an obligor and funded by a lender.
            (8) Local servicer.--The term ``local servicer'' means a 
        State infrastructure bank established under section 350 of the 
        National Highway System Designation Act of 1995 (109 Stat. 
        618), or a State or local government or any agency thereof that 
        is responsible for servicing a direct loan on behalf of the 
        Secretary.
            (9) Obligor.--The term ``obligor'' means any party 
        primarily liable for payment of the principal of or interest on 
        any direct loan made under section 5 or 6, whether a 
        corporation, partnership, joint venture, trust, or governmental 
        entity or instrumentality, except that if such entity is not a 
        State or local government or any agency thereof, the project it 
        is undertaking shall be publicly sponsored, as provided in 
        paragraphs (1) and (2) of section 4(a).
            (10) Project.--The term ``project'' means any surface 
        transportation facility eligible for Federal assistance under 
        title 23 or chapter 53 of title 49, United States Code.
            (11) Project obligation.--The term ``project obligation'' 
        means any note, bond, debenture, or other evidence of 
        indebtedness issued by an obligor in connection with the 
        financing of a project other than a direct loan provided under 
        this Act.
            (12) Secretary.--The term ``Secretary'' means the Secretary 
        of Transportation.
            (13) State.--The term ``State'' shall have the meaning such 
        term has in section 101 of title 23, United States Code.
            (14) Substantial completion.--The term ``substantial 
        completion'' means the time at which a project opens to 
        vehicular, passenger, or freight traffic.

SEC. 4. DETERMINATION OF ELIGIBILITY AND PROJECT SELECTION.

    (a) Eligibility.--For a project to receive financial assistance 
under this Act, it must meet the following criteria:
            (1) The project shall satisfy the applicable statewide 
        planning requirements of section 135 of title 23, United States 
        Code, and the metropolitan planning requirements of section 134 
        of title 23, United States Code, at the time any loan or 
        insurance agreement is entered into under this Act.
            (2) The project application shall be submitted to the 
        Secretary by a State or a local servicer.
            (3) Eligible project costs must equal or exceed the lesser 
        of $100,000,000 or 50 percent of the most recent annual amount 
        of Federal-aid highway funds apportioned under title 23, United 
        States Code, to the State in which the project is located.
            (4) Project financing shall be payable in whole or in part 
        by user charges or other dedicated revenue sources.
    (b) Selection Among Eligible Projects.--The Secretary shall 
establish criteria for selecting among projects that meet the 
eligibility criteria of subsection (a). Such selection criteria shall 
include--
            (1) the extent to which the project is nationally 
        significant, including the extent to which the project will 
        transport passengers or freight at lower costs or higher 
        efficiency, will advance multistate corridors, or will 
        otherwise promote metropolitan, regional, interstate, or 
        international commerce;
            (2) the creditworthiness of the project;
            (3) the extent to which assistance under this Act would 
        foster innovative public-private partnerships and attract 
        private debt or equity investment;
            (4) the likelihood that assistance under this Act would 
        enable the project to proceed at an earlier date than would be 
        the case otherwise; and
            (5) the amount of budget authority required to fund the 
        direct loan or project development cost insurance provided 
        under this Act.
    (c) Federal Requirements.--All requirements of titles 23 and 49, 
United States Code, shall apply to funds made available under this Act 
and projects assisted with such funds unless the Secretary determines 
that any such requirement, other than section 113 of title 23, United 
States Code, is inconsistent with any provision of this Act. Nothing in 
this subsection shall affect any responsibility or obligation of the 
Secretary under any other Federal law, including the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), title VI of 
the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.), and the Uniform 
Relocation Assistance and Real Property Acquisition Policies Act of 
1970 (42 U.S.C. 4601 et seq.).

SEC. 5. FLEXIBLE PAYMENT LOANS.

    (a) In General.--The Secretary is authorized to enter into 
agreements with 1 or more obligors to make direct loans pursuant to the 
Federal Credit Reform Act of 1990 the proceeds of which are used either 
to finance eligible project costs or refinance interim construction 
financing of such costs of any project selected under section 4, except 
that no loan agreement shall refinance interim construction financing 
later than 1 year after substantial completion of construction.
    (b) Terms and Limitations.--
            (1) A loan agreement under this section shall be on such 
        terms and conditions and contain such covenants, 
        representations, warranties, and requirements (including 
        requirements for audits) as the Secretary determines.
            (2) A direct loan shall have a lien on project revenues or 
        other dedicated revenue sources, and may be subject to prior 
        liens securing project obligations; however, any Federal claim 
        on project assets shall not be subordinated to the claims of 
        other lenders in the event of default by the obligor.
            (3) The Secretary shall not make a direct loan exceeding 33 
        percent of eligible project costs.
            (4) The final maturity date of a direct loan shall not 
        exceed 30 years from the date of substantial completion.
            (5) The interest rate on a direct loan shall equal the 
        yield on marketable United States Treasury securities with a 
        similar maturity to that of such direct loan on the date of 
        execution of the loan agreement.
    (c) Repayment.--Loan repayments on a direct loan must commence not 
later than 5 years after substantial completion of the project and 
shall be payable not less frequently than semiannually. In the event 
that, in the first 10 years following substantial completion, the 
project (after paying operation and maintenance costs or debt service 
on any project obligations senior to the direct loan) is unable to 
generate sufficient revenues to pay scheduled principal and interest, 
the Secretary may allow the obligor to add unpaid principal and 
interest to the outstanding balance of the direct loan, if the obligor 
demonstrates that it is using due diligence to increase revenues or 
decrease costs so as to become current in its payments.
    (d) Loan Guarantees.--
            (1) In general.--The Secretary may provide a loan guarantee 
        to a lender in lieu of making a direct loan.
            (2) Terms.--The terms of a guaranteed loan shall be 
        consistent with those set forth in this section for a direct 
        loan, except that the rate on the guaranteed loan and any 
        prepayment features shall be negotiated between the obligor and 
        the lender, with the consent of the Secretary.

SEC. 6. STANDBY LINES OF CREDIT.

    (a) In General.--The Secretary is authorized to enter into 
agreements with 1 or more obligors to make direct loans pursuant to the 
Federal Credit Reform Act of 1990 at future dates in the form of lines 
of credit for any project selected under section 4. The proceeds of a 
line of credit provided under this section shall be available to pay 
debt service on project obligations issued to finance eligible project 
costs.
    (b) Terms and Limitations.--A line of credit provided under this 
section shall be subject to the following conditions:
            (1) A line of credit under this section shall be on such 
        terms and conditions and contain such covenants, 
        representations, warranties, and requirements (including 
        requirements for audits), as the Secretary determines.
            (2) A draw on a line of credit shall only be made if net 
        revenues from the project (including capitalized interest, any 
        debt service reserve fund, or any other available reserves) are 
        insufficient to pay debt service on project obligations.
            (3) A line of credit shall be available during the period 
        beginning on the date of substantial completion and ending no 
        later than the day that is 10 years following such date.
            (4) The total amount of a line of credit shall not exceed 
        33 percent of eligible project costs, and the amount drawn in 
        any single year shall not exceed 20 percent of the total amount 
        of the line of credit.
            (5) Any draw on a line of credit under this section shall 
        represent a direct loan as defined in the Federal Credit Reform 
        Act of 1990 and shall be repaid within 30 years from the date 
        of such draw.
            (6) The interest rate on a draw shall equal the yield on 
        30-year marketable United States Treasury securities as of the 
        date the line of credit is committed.
            (7) No third party creditor of the obligor shall have any 
        right against the Federal Government with respect to any draw 
        on a line of credit.
            (8) A line of credit shall not be issued for a project that 
        is also the recipient of a flexible payment loan under section 
        5.
    (c) Repayment.--Loan repayments shall commence within 5 years of a 
draw and shall be payable not less frequently than semi-annually. The 
direct loan evidencing the draw shall have a lien on project revenues 
or other dedicated revenue sources, and may be subject to prior liens 
securing project obligation; however, any Federal claim on project 
assets shall not be subordinated to the claims of other lenders in the 
event of default by the obligor. In the event that, in the first 10 
years following substantial completion, the project (after paying 
operation and maintenance costs or any debt service on project 
obligations senior to the draw) is unable to generate sufficient 
revenues to pay scheduled principal and interest, the Secretary may 
allow the obligor to add unpaid principal and interest to the 
outstanding balance of the draw, if the obligor demonstrates that it is 
using due diligence to increase revenues or decrease costs so as to 
become current in its payments. Unpaid interest or principal shall 
continue to accrue interest until the next payment date.

SEC. 7. PROJECT DEVELOPMENT COST INSURANCE PILOT PROGRAM.

    (a) In General.--The Secretary may establish a pilot program to 
encourage public-private partnerships and facilitate infrastructure 
development by entering into agreements with 1 or more insureds to 
provide insurance for preconstruction costs associated with any project 
selected under section 4. Such program shall be designed to efficiently 
and equitably allocate risks and responsibilities among governmental 
sponsors and private developers of projects anticipated to be supported 
in whole or in part by user charges or other dedicated revenue sources. 
Such program shall provide insurance for the noncommercial risks and 
other preconstruction costs, as defined in section 3(2)(A).
    (b) Terms and Scope of Coverage.--The insurance provided under this 
section may cover preconstruction costs incurred by an insured for a 
project selected under section 4 that will not proceed to construction 
due to inability to secure governmental permits and approvals, 
challenges to such permits and approvals, events of force majeure, or 
other factors, as determined by the Secretary, in accordance with the 
following terms:
            (1) The Federal share of any insurance provided under this 
        section shall not exceed 40 percent of the project costs 
        included in section 3(2)(A). Such costs must be incurred 
        subsequent to the date of issuance of the insurance. In no case 
        may the Federal share exceed $4,000,000.
            (2) The State or local government share of any insurance 
        provided under this section shall equal at least 20 percent of 
        the project costs included in section 3(2)(A), unless the 
        Secretary determines otherwise.
            (3) The Secretary may impose such other conditions and 
        requirements in connection with any insurance provided under 
        this section as the Secretary deems appropriate, including 
        requirements for audits.
    (c) Payment of Claims and Reimbursement.--Upon determining that a 
project insured under this section will not proceed to construction 
within 5 years from the date of issuance of the insurance, the 
Secretary shall pay the insured the Federal share of the insurance. The 
Secretary may require the insured to reimburse the Secretary for any 
proceeds paid under this section if the project later proceeds to 
construction.
    (d) Insurance Fees.--The Secretary may charge such fees and obtain 
other compensation for providing insurance coverage under this section 
as the Secretary deems appropriate, payable upon execution of the 
insurance agreement. Such fees and compensation shall be deposited into 
the Highway Trust Fund (other than the Mass Transit Account).

SEC. 8. PROJECT SERVICING.

    The State in which a project receiving financial assistance under 
this Act is located shall identify a local servicer to assist the 
Secretary in servicing the direct loan or insurance provided under this 
Act. Such local servicer shall act as the agent for the Secretary, and 
may receive a servicing fee, subject to approval by the Secretary. Such 
local servicer shall not be liable for the obligations of the obligor 
to the Secretary.

SEC. 9. OFFICE OF INFRASTRUCTURE FINANCE.

    (a) Duties of the Secretary.--Section 301 of title 49, United 
States Code, is amended--
            (1) in paragraph (7), by striking ``and'' at the end;
            (2) in paragraph (8), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(9) develop and coordinate Federal policy on financing 
        transportation infrastructure, including the provision of 
        direct Federal credit assistance and other techniques used to 
        leverage Federal transportation funds.''.
    (b) Office of Infrastructure Finance.--
            (1) In general.--Chapter 1 of title 49, United States Code, 
        is amended by adding at the end the following:
``Sec. 113. Office of Infrastructure Finance
    ``(a) Establishment.--The Secretary of Transportation shall 
establish within the Office of the Secretary an Office of 
Infrastructure Finance.
    ``(b) Director.--The Office shall be headed by a Director who shall 
be appointed by the Secretary not later than 180 days after the date of 
enactment of this section.
    ``(c) Functions.--The Director shall be responsible for--
            ``(1) carrying out the responsibilities of the Secretary 
        described in section 301(9);
            ``(2) carrying out research on financing transportation 
        infrastructure, including educational programs at a designated 
        academic center and other initiatives to support Federal, 
        State, and local government efforts; and
            ``(3) providing technical assistance to Federal, State, and 
        local government agencies and officials to facilitate the 
        development and use of alternative techniques for financing 
        transportation infrastructure.''.
            (2) Conforming amendment.--The analysis for chapter 1 of 
        title 49, United States Code, is amended by adding at the end 
        the following:

``113. Office of Infrastructure Finance.''.

SEC. 10. RULES AND REGULATIONS.

    The Secretary is authorized to make such rules and regulations as 
deemed necessary or appropriate to carry out the purposes and 
provisions of this Act.

SEC. 11. STATE AND LOCAL PERMITS.

    The provision of financial assistance under this Act shall not--
            (1) relieve any recipient of such assistance of any 
        obligation to obtain any required State or local permits and 
        approvals;
            (2) limit the right of any State or local governmental unit 
        to approve or regulate rates of return on private equity 
        invested in a project; or
            (3) otherwise supersede any State or local law or 
        regulation applicable to the construction or operation of such 
        project.

SEC. 12. FUNDING.

    (a) Determination of Budget Authority.--The Secretary shall 
estimate the budget authority associated with providing financial 
assistance to projects under this Act utilizing credit models of 1 or 
more independent, nationally-recognized rating agencies.
    (b) Use of Unobligated Balances.--Notwithstanding any limitation on 
obligations for Federal-aid highways and highway safety construction 
programs, a State may obligate in a fiscal year the unobligated 
balances of funds apportioned to the State in the preceding 3 fiscal 
years under section 104(b)(1), 104(b)(2), 104(b)(3), 104(b)(5)(B), 144, 
or 160 of title 23, United States Code, or funds allocated to the State 
in the preceding 3 fiscal years under section 157 of such title or 
section 1013(c) or 1015 of the Intermodal Surface Transportation 
Efficiency Act of 1991, for the budget costs of providing financial 
assistance under this Act, as estimated by the Secretary under 
subsection (a).
    (c) Reestimates of Budget Costs.--Any reestimates of costs 
resulting in increases in budget authority necessary to fund the 
financial assistance provided under this Act shall be funded from the 
General Fund of the Treasury.
    (d) Limitations on Obligations.--
            (1) In general.--Obligations authorized under subsection 
        (b) of this section to fund estimated budget costs shall be 
        limited to $100,000,000 for each of fiscal years 1998 through 
        2003.
            (2) Budget costs of insurance.--Not more than 10 percent of 
        the obligational authority made available annually under this 
        section shall be used to fund the budget costs of insurance 
        under section 7 of this Act.
    (e) Limitations on Credit Amounts.--Principal amounts of Federal 
credit instruments and the Federal share of insurance coverage provided 
under this Act shall not exceed $2,000,000,000 for each of fiscal years 
1998 through 2003.
    (f) Special Rule for Urbanized Areas.--Funds apportioned or 
allocated under section 104(b)(2), 104(b)(3), or 160 of title 23, 
United States Code, or under section 1013(c) or 1015 of the Intermodal 
Surface Transportation Efficiency Act of 1991, and attributed to an 
urbanized area with a population of over 200,000 under section 
133(d)(2) of such title, may be obligated for the budget costs of 
projects receiving financial assistance under this title only if the 
metropolitan planning organization designated for such urbanized area 
concurs, in writing, with such obligation.

SEC. 13. REPORT TO CONGRESS.

    Not later than 5 years after the date of the enactment of this Act, 
the Secretary shall transmit to Congress a report on the benefits, if 
any, of transferring the operation of the programs established by this 
Act to a Government corporation or other Government-sponsored 
enterprise.
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