[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2777 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 2777

To fund capital projects of State and local governments, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 5, 1999

Mr. Metcalf (for himself, Mr. Hinchey, and Mr. Campbell) introduced the 
 following bill; which was referred to the Committee on Transportation 
                           and Infrastructure

_______________________________________________________________________

                                 A BILL


 
To fund capital projects of State and local governments, 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 and 
Local Government Capital Enhancement Act''.

SEC. 2. FINDINGS AND PURPOSES DEFINITIONS.

    (a) Findings.--The Congress finds as follows:
            (1) Citizens chronically complain about the state of 
        America's public capital--about dilapidated school buildings, 
        condemned highway bridges, contaminated water supplies, and 
        other shortcomings of the public infrastructure.
            (2) In addition to inflicting inconvenience and endangering 
        health, the inadequacy of the public infrastructure adversely 
        affects productivity and the growth of the economy, since 
        public investment, private investment, and productivity are 
        intimately linked.
            (3) For more than 2 decades, the United States Government 
        has retreated from public investment as the costs of 
        entitlements and of the interest payable on rapidly rising debt 
        have mounted.
            (4) State and local governments, albeit to a lesser extent, 
        have also slowed public investments and State and local 
        taxpayers are frequently reluctant to approve bond issues to 
        finance public infrastructure.
            (5) In the early 1970s, nondefense public investment 
        accounted for 3.2 percent of gross domestic product but it now 
        accounts for only 2.5 percent.
            (6) Widespread neglect of maintenance has contributed 
        substantially to the failure of the stock of public capital 
        assets to keep pace with the Nation's needs.
            (7) Net of depreciation, the real nondefense public capital 
        stock expanded in the past 2 decades at a pace only half that 
        set earlier in the post-World War II period.
            (8) Evidence of failures to maintain and improve 
        infrastructure is seen every day in such problems as unsafe 
        bridges, urban decay, dilapidated and over-crowded schools, and 
        inadequate airports.
            (9) A congressional study found that education is seriously 
        handicapped by deteriorating school buildings and that an 
        investment of $110,000,000,000 is needed to bring them up to 
        minimally acceptable condition.
            (10) The problems take a toll in less visible and perhaps 
        even more important ways--in unsatisfactory gains in private 
        sector productivity and a diminished rise in the real income 
        for the nation at large.
            (11) Seemingly endless traffic jams, disruptions to 
        commuter rail service, and backed-up airport runways--everyday 
        experiences for many Americans--spell waste and inefficiency 
        for the economy at large.
            (12) Congestion on the Nation's highways alone costs the 
        Nation some $100,000,000,000 a year according to the 
        Competitiveness Policy Council estimate (1993), and that 
        estimate does not include the costs of added pollution and of 
        wear and tear on vehicles.
            (13) This Act--
                    (A) is fiscally sound and follows the best 
                accounting practices of the private sector;
                    (B) is designed to help the Nation take a 
                significant step forward both in overcoming its 
                infrastructure deficit and in promoting the 
                productivity needed to meet the competitive challenges 
                of the 21st century; and
                    (C) represents fiscally sound planning and, in 
                salient ways, advances sound fiscal operation.
    (b) Purposes.--The purposes of this Act are as follows:
            (1) To provide up to $50,000,000,000 a year for mortgage 
        loans, at zero percent interest, to State and local governments 
        for capital investment in types of infrastructure projects 
        specified by Congress and the President in a way that would not 
        affect the conduct of a sound monetary policy based on price 
        stability.
            (2) To cut the overall cost of investment in infrastructure 
        projects about in half, depending on prevailing interest rates, 
        for State and local taxpayers.

SEC. 3. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Bank.--The term ``Bank'' means the Federal Bank for 
        Infrastructure Modernization established under section 4.
            (2) Board.--The term ``Board'' means the Board of Governors 
        of the Federal Reserve System.
            (3) Development.--The terms ``development'' and ``develop'' 
        mean, with respect to an infrastructure facility, any--
                    (A) preconstruction planning, feasibility review, 
                permitting and design work, and other preconstruction 
                activities; and
                    (B) construction, reconstruction, rehabilitation, 
                replacement, or expansion.
            (4) Indian reservation.--The term ``Indian reservation'' 
        has the same meaning as in section 4(10) of the Indian Child 
        Welfare Act of 1978, and shall include land held by 
incorporated Native groups, regional corporations, and village 
corporations, as defined in or established pursuant to the Alaska 
Native Claims Settlement Act, public domain Indian allotments, and 
former Indian reservations in the State of Oklahoma.
            (5) Indian tribe.--The term ``Indian tribe'' means any 
        Indian tribe, band, pueblo, nation, or other organized group or 
        community, including any Alaska Native village or regional or 
        village corporation, as defined in or established pursuant to 
        the Alaska Native Claims Settlement Act, which is recognized as 
        eligible for the special programs and services provided by the 
        United States to Indians because of their status as Indians.
            (6) Infrastructure facility.--The term ``infrastructure 
        facility'' means a road, highway, bridge, tunnel, airport, mass 
        transportation vehicle or system, passenger or freight rail 
        vehicle or system, intermodal transportation facility, 
        waterway, commercial port, drinking or waste water treatment 
        facility, solid waste disposal facility, pollution control 
        system, hazardous waste facility, federally designated national 
        information highway facility, school, and any ancillary 
        facility which forms a part of any such facility or is 
        reasonably related to such facility.
            (7) Regional or multistate organization.--The term 
        ``regional or multistate organization'' means an organization 
        established by an interstate compact between 2 or more States 
        which has been approved by the Congress.
            (8) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (9) State.--The term ``State'' includes the District of 
        Columbia, Puerto Rico, Guam, American Samoa, the Trust 
        Territories of the Pacific Islands, the Virgin Islands, the 
        Northern Mariana Islands, and any territory of the United 
        States.

SEC. 4. FEDERAL BANK FOR INFRASTRUCTURE MODERNIZATION.

    (a) Establishment.--
            (1) In general.--There is hereby established a corporation 
        which shall be known as the Federal Bank for Infrastructure 
        Modernization.
            (2) Status.--The Bank shall be--
                    (A) an instrumentality of the United States 
                Government; and
                    (B) under the general supervision and direction of 
                the Secretary of the Treasury.
    (b) Management.--
            (1) Board of trustees.--The management of the Bank shall be 
        vested in the Board of Directors of the Federal Financing Bank.
    (c) Powers.--The Bank shall have the following powers:
            (1) To adopt, alter, and use a corporate seal.
            (2) To issue nonvoting capital stock in accordance with 
        section 5.
            (3) To enter into contracts and modify, or consent to the 
        modification of, any contract or agreement to which the Bank is 
        a party or in which the Bank has an interest under this 
        section.
            (4) To appoint, by the board of directors, such officers 
        and employees as the board of directors determines to be 
        necessary to carry out the provisions of this Act, to define 
        their duties, fix their compensation, require bonds of them and 
        fix the penalty thereof, and to dismiss at pleasure such 
        officers or employees.
            (5) To make advance, progress, or other payments.
            (6) To acquire, hold, lease, mortgage, maintain, or dispose 
        of, at public or private sale, real and personal property, 
        using any legally available private sector methods, and 
        otherwise exercise all the usual incidents of ownership of 
        property necessary and convenient to the operations of the 
        Bank.
            (7) To sue and be sued in its corporate capacity in any 
        court of competent jurisdiction.
            (8) To use the United States mails in the same manner and 
        under the same conditions as other departments and agencies of 
        the United States.
            (9) To prescribe bylaws that shall be consistent with law.

SEC. 5. CAPITALIZATION OF THE BANK.

    (a) Issuance and Sale of Stock.--The Bank may--
            (1) issue nonvoting capital stock under section 4(c)(2) 
        only at such times and in such amounts as--
                    (A) the Secretary determines to be appropriate for 
                the issuance of such stock; and
                    (B) the Board determines to be appropriate for the 
                purchase of such stock; and
            (2) sell such stock only to the Board or, at the Board's 
        direction, a Federal reserve bank.
    (b) Purchase of Capital Stock by Federal Reserve Board.--
            (1) In general.--Subject to subsection (c) and the 
        direction of the Federal Open Market Committee, the Board of 
        Governors of the Federal Reserve System, acting directly or 
        through any Federal reserve bank, shall invest in nonvoting 
        capital stock of the Bank at such times and in such amounts as 
        the Board determines to be appropriate under this section.
            (2) Maximum annual amount limitation.--The amount invested 
        by the Board in the capital stock of the Bank in any year may 
        not exceed $50,000,000,000.
    (c) Integration of Stock Purchases Into Open-Market Operations.--
            (1) In general.--The investment of the Board in stock of 
        the Bank under this section shall be integrated into the open-
        market operations of the Federal Open Market Committee under 
        section 12B of the Federal Reserve Act and the directions of 
        the Federal Open Market Committee to the Federal reserve banks 
        with regard to open-market operations shall take into account, 
        and may include directions with regard to, any such investment.
            (2) Treatment of stock.--Capital stock of the Bank shall be 
        treated as obligations of an agency of the United States for 
        purposes of section 14(b)(2) of the Federal Reserve Act.
    (d) Use of Capital.--The capital of the Bank may be used only for 
making loans under section 6.
    (e) Retirement of Stock.--Nonvoting stock issued under this section 
shall be repurchased and retired from amount received from the 
repayment of loans under section 6.

SEC. 6. ISSUANCE OF INFRASTRUCTURE LOANS.

    (a) In General.--The Bank may make loans to eligible borrowers for 
the development of infrastructure facilities, if the Bank obtains such 
assurances as the Bank determines to be appropriate from the borrower 
that--
            (1) the funding of the project by the Bank was approved 
        by--
                    (A) a State certifying officer, in the case of an 
                infrastructure facility development project proposed by 
                a governmental unit within such State;
                    (B) the Secretary of the Interior, in the case of a 
                project proposed by an Indian tribe; or
                    (C) the State certifying officer of each State 
                involved, in the case of an infrastructure facility 
                development project proposed by a regional or 
                multistate organization.
            (2) the proceeds of such loan will be used solely for the 
        purpose of funding the development of any infrastructure 
        facility;
            (3) the borrower will establish and maintain over the life 
        of the loan a sinking fund or other amortizing mechanism that 
        would ensure that the repayment of the principal of the loan 
        will be made in accordance with the repayment schedule 
        contained in the loan documents; and
            (4) the Bank will have full access to such books and 
        records of the borrower as the Bank may, from time to time, 
        determine to be necessary to audit the borrower's compliance 
        with the terms and conditions of the loan.
    (b) No Interest.--Any loan made under this Act shall bear no 
interest.
    (c) Allocation.--
            (1) In general.--The Secretary shall establish an 
        allocation formula, on the basis of the total population of 
        each State and Indian reservation, to determine the manner in 
        which the total amount of loan disbursements which may be made 
        in any year shall be allocated among the States and Indian 
        tribes.
            (2) Regional or multistate organization.--In developing an 
        allocation formula, the Secretary shall provide for the 
        allocation of loans to regional or multistate organizations 
        through appropriate adjustments of allocated amounts to the 
        States which established any such regional or multistate 
        organization.

SEC. 7. BORROWER ELIGIBILITY.

    (a) In General.--Subject to subsections (b) and (c), any State, any 
unit of general local government of a State, any Indian tribe, and any 
regional or multistate organization shall be eligible to borrow from 
the Bank under this Act to fund the development of infrastructure 
facilities.
    (b) State Certifying Officer.--No loans may be made to any State or 
any unit of general local government of any State, or to any regional 
or multistate organization to which such State is a party, unless the 
State has authorized an officer of the State to--
            (1) review all proposals by any officer or agency of the 
        State or any unit of general local government to develop an 
        infrastructure facility for which funding is sought from the 
        Bank; and
            (2) select and approve the proposals which meet the 
        requirements of this Act for funding by the Bank consistent 
        with the allocation formula established by the Secretary of the 
        Treasury, including requirements of the Bank with regard to--
                    (A) the establishment of sinking funds or other 
                amortizing mechanisms to ensure timely repayment of any 
                loan; and
                    (B) the auditing of the books and records of the 
                recipient of the loan.
    (c) Secretary of the Interior.--No loans may be made to any Indian 
tribe unless the Secretary of the Interior undertakes to--
            (1) review all proposals by any Indian tribe to develop an 
        infrastructure facility for which funding is sought from the 
        Bank; and
            (2) select and approve the proposals which meet the 
        requirements of this Act for funding by the Bank consistent 
        with the allocation formula established by the Secretary of the 
        Treasury, including requirements of the Bank with regard to--
                    (A) the establishment of sinking funds or other 
                amortizing mechanisms to ensure timely repayment of any 
                loan; and
                    (B) the auditing of the books and records of the 
                recipient of a loan.

SEC. 8. ADMINISTRATIVE PROVISIONS.

    (a) Minimum Phase-In Period.--Loans made under section 6 shall be 
disbursed by the Bank immediately or over the construction or 
development period of the project as needed so as to accommodate more 
loan requests. The payout in any given year shall be no less than 20 
percent of the total amount authorized.
    (b) Period to Maturity.--The period to maturity of any loan made 
under section 6 shall not be less than 10 years nor more than 30 years, 
at the discretion of the borrower, but may be paid earlier.
    (c) Administrative Fees.--The Bank shall impose an administrative 
fee of not more than one-quarter of 1 percent on each recipient of a 
loan, sufficient to cover administrative costs incurred by the Bank, 
including overhead, in administering such loan.
    (d) Collection of Principal and Fees.--The Bank shall enforce 
collection of any loan in which 2 or more payments are due and payable. 
To that end, the Bank shall be empowered to enter Federal district 
court to seek an order to attach property of the borrower, up to the 
amount necessary to end the delinquency. The cost of collection shall 
be added to the balance of the loan. The borrower shall continue to 
make semiannual payments of the same amount until the entire balance, 
including fees, is paid.

SEC. 9. ABOLISHMENT OF BANK.

    (a) Winding Up Operations.--The Bank shall wind up the affairs of 
the Bank during the 6-month period ending on the date the last 
outstanding loan issued by the Bank under this Act is repaid.
    (b) Bank Abolished.--Effective at the end of the 30-day period 
beginning on the date described in subsection (a), the Bank is hereby 
abolished.
                                 <all>