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Appendix E: Pending Federal Credit Legislation and Side-by-Side Comparison
Transportation Infrastructure Finance and Innovation Act of 1997 (Subtitle C, Chapter 2 of S. 1173)
SEC. 1311. SHORT TITLE.
This chapter may be cited as the `Transportation Infrastructure Finance and Innovation Act of 1997'.
SEC. 1312. FINDINGS.
Congress finds that--
(1) a well-developed system of transportation infrastructure is critical to the economic well-being, health, and welfare of the people of the United States;
(2) traditional public funding techniques such as grant programs are unable to keep pace with the infrastructure investment needs of the United States because of budgetary constraints at the Federal, State, and local levels of government;
(3) major transportation infrastructure facilities that address critical national needs, such as intermodal facilities, border crossings, and multistate trade corridors, are of a scale that exceeds the capacity of Federal and State assistance programs in effect on the date of enactment of this Act;
(4) new investment capital can be attracted to infrastructure projects that are capable of generating their own revenue streams through user charges or other dedicated funding sources; and
(5) a Federal credit program for projects of national significance can complement existing funding resources by filling market gaps, thereby leveraging substantial private co-investment.
SEC. 1313. DEFINITIONS.
In this chapter:
(1) ELIGIBLE PROJECT COSTS- The term `eligible project costs' means amounts substantially all of which are paid by, or for the account of, an obligor in connection with a project, including the cost of--
(A) development phase activities, including planning, feasibility analysis, revenue forecasting, environmental review, permitting, preliminary engineering and design work, and other preconstruction activities;
(B) construction, reconstruction, rehabilitation, replacement, and acquisition of real property (including land related to the project and improvements to land), environmental mitigation, construction contingencies, and acquisition of equipment; and
(C) interest during construction, reasonably required reserve funds, capital issuance expenses, and other carrying costs during construction.
(2) FEDERAL CREDIT INSTRUMENT- The term `Federal credit instrument' means a secured loan, loan guarantee, or line of credit authorized to be made available under this chapter with respect to a project.
(3) 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 144A(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.
(4) LINE OF CREDIT- The term `line of credit' means an agreement entered into by the Secretary with an obligor under section 1316 to provide a direct loan at a future date upon the occurrence of certain events.
(5) LOAN GUARANTEE- The term `loan guarantee' means any guarantee or other pledge by the Secretary to pay all or part of the principal of and interest on a loan or other debt obligation issued by an obligor and funded by a lender.
(6) LOCAL SERVICER- The term `local servicer' means--
(A) a State infrastructure bank established under title 23, United States Code; or
(B) a State or local government or any agency of a State or local government that is responsible for servicing a Federal credit instrument on behalf of the Secretary.
(7) OBLIGOR- The term `obligor' means a party primarily liable for payment of the principal of or interest on a Federal credit instrument, which party may be a corporation, partnership, joint venture, trust, or governmental entity, agency, or instrumentality.
(8) PROJECT- The term `project' means any surface transportation project eligible for Federal assistance under title 23 or chapter 53 of title 49, United States Code.
(9) PROJECT OBLIGATION- The term `project obligation' means any note, bond, debenture, or other debt obligation issued by an obligor in connection with the financing of a project, other than a Federal credit instrument.
(10) SECURED LOAN- The term `secured loan' means a direct loan or other debt obligation issued by an obligor and funded by the Secretary in connection with the financing of a project under section 1315.
(11) STATE- The term `State' has the meaning given the term in section 101 of title 23, United States Code.
(12) SUBSTANTIAL COMPLETION- The term `substantial completion' means the opening of a project to vehicular or passenger traffic.
SEC. 1314. DETERMINATION OF ELIGIBILITY AND PROJECT SELECTION.
(a) ELIGIBILITY- To be eligible to receive financial assistance under this chapter, a project shall meet the following criteria:
(1) INCLUSION IN TRANSPORTATION PLANS AND PROGRAMS- The project--
(A) shall be included in the State transportation plan required under section 135 of title 23, United States Code; and
(B) at such time as an agreement to make available a Federal credit instrument is entered into under this chapter, shall be included in the approved State transportation improvement program required under section 134 of that title.
(2) APPLICATION- A State, a local servicer identified under section 1317(a), or the entity undertaking the project shall submit a project application to the Secretary.
(3) ELIGIBLE PROJECT COSTS-
(A) IN GENERAL- Except as provided in subparagraph (B), to be eligible for assistance under this chapter, a project shall have eligible project costs that are reasonably anticipated to equal or exceed the lesser of--
(i) $100,000,000; or
(ii) 50 percent of the amount of Federal-aid highway funds apportioned for the most recently-completed fiscal year under title 23, United States Code, to the State in which the project is located.
(B) INTELLIGENT TRANSPORTATION SYSTEM PROJECTS- In the case of a project involving the installation of an intelligent transportation system, eligible project costs shall be reasonably anticipated to equal or exceed $30,000,000.
(4) DEDICATED REVENUE SOURCES- Project financing shall be repayable in whole or in part by user charges or other dedicated revenue sources.
(5) PUBLIC SPONSORSHIP OF PRIVATE ENTITIES- In the case of a project that is undertaken by an entity that is not a State or local government or an agency or instrumentality of a State or local government, the project that the entity is undertaking shall be publicly sponsored as provided in paragraphs (1) and (2).
(b) SELECTION AMONG ELIGIBLE PROJECTS-
(1) ESTABLISHMENT- The Secretary shall establish criteria for selecting among projects that meet the eligibility criteria specified in subsection (a).
(2) SELECTION CRITERIA- The selection criteria shall include the following:
(A) The extent to which the project is nationally or regionally significant, in terms of generating economic benefits, supporting international commerce, or otherwise enhancing the national transportation system.
(B) The creditworthiness of the project, including a determination by the Secretary that any financing for the project has appropriate security features, such as a rate covenant, to ensure repayment. The Secretary shall require each project applicant to provide a preliminary rating opinion letter from a nationally recognized bond rating agency.
(C) The extent to which assistance under this chapter would foster innovative public-private partnerships and attract private debt or equity investment.
(D) The likelihood that assistance under this chapter would enable the project to proceed at an earlier date than the project would otherwise be able to proceed.
(E) The extent to which the project uses new technologies, including intelligent transportation systems, that enhance the efficiency of the project.
(F) The amount of budget authority required to fund the Federal credit instrument made available under this chapter.
(c) FEDERAL REQUIREMENTS- The following provisions of law shall apply to funds made available under this chapter and projects assisted with the funds:
[Struck out->] (1) Section 113 of title 23, United States Code. [<-Struck out]
[Struck out->] (2) [<-Struck out] (1) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.).
[Struck out->] (3) [<-Struck out] (2) The National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
[Struck out->] (4) [<-Struck out] (3) The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601 et seq.).
[Struck out->] (5) Section 5333 of title 49, United States Code. [<-Struck out]
SEC. 1315. SECURED LOANS.
(a) IN GENERAL-
(1) AGREEMENTS- Subject to paragraphs (2) and (3), the Secretary may enter into agreements with 1 or more obligors to make secured loans, the proceeds of which shall be used--
(A) to finance eligible project costs; or
(B) to refinance interim construction financing of eligible project costs of any project selected under section 1314.
(2) LIMITATION ON REFINANCING OF INTERIM CONSTRUCTION FINANCING- A loan under paragraph (1) shall not refinance interim construction financing under paragraph (1)(B) later than 1 year after the date of substantial completion of the project.
(3) AUTHORIZATION PERIOD- The Secretary may enter into a loan agreement during any of fiscal years 1998 through 2003.
(b) TERMS AND LIMITATIONS-
(1) IN GENERAL- A secured loan under this section with respect to a project shall be on such terms and conditions and contain such covenants, representations, warranties, and requirements (including requirements for audits) as the Secretary determines appropriate.
(2) MAXIMUM AMOUNT- The amount of the secured loan shall not exceed 33 percent of the reasonably anticipated eligible project costs.
(3) PAYMENT- The secured loan--
(A) shall be payable, in whole or in part, from revenues generated by any rate covenant, coverage requirement, or similar security feature supporting the project obligations or from a dedicated revenue stream; and
(B) may have a lien on revenues described in subparagraph (A) subject to any lien securing project obligations.
(4) INTEREST RATE- The interest rate on the secured loan shall be equal to the yield on marketable United States Treasury securities of a similar maturity to the maturity of the secured loan on the date of execution of the loan agreement.
(5) MATURITY DATE- The final maturity date of the secured loan shall be not later than 35 years after the date of substantial completion of the project.
(6) NONSUBORDINATION- The secured loan shall not be subordinated to the claims of any holder of project obligations in the event of bankruptcy, insolvency, or liquidation of the obligor.
(7) FEES- The Secretary may establish fees at a level sufficient to cover the costs to the Federal Government of making a secured loan under this section.
(c) REPAYMENT-
(1) SCHEDULE- The Secretary shall establish a repayment schedule for each secured loan under this section based on the projected cash flow from project revenues and other repayment sources.
(2) COMMENCEMENT- Scheduled loan repayments of principal or interest on a secured loan under this section shall commence not later than 5 years after the date of substantial completion of the project.
(3) SOURCES OF REPAYMENT FUNDS- The sources of funds for scheduled loan repayments under this section shall include tolls, user fees, or other dedicated revenue sources.
(4) DEFERRED PAYMENTS-
(A) AUTHORIZATION- If, at any time during the 10 years after the date of substantial completion of the project, the project is unable to generate sufficient revenues to pay scheduled principal and interest on the secured loan, the Secretary may, pursuant to established criteria for the project agreed to by the entity undertaking the project and the Secretary, allow the obligor to add unpaid principal and interest to the outstanding balance of the secured loan.
(B) INTEREST- Any payment deferred under subparagraph (A) shall--
(i) continue to accrue interest in accordance with subsection (b)(4) until fully repaid; and
(ii) be scheduled to be amortized over the remaining term of the loan beginning not later than 10 years after the date of substantial completion of the project in accordance with paragraph (1).
(5) PREPAYMENT-
(A) USE OF EXCESS REVENUES- Any excess revenues that remain after satisfying scheduled debt service requirements on the project obligations and secured loan and all deposit requirements under the terms of any trust agreement, bond resolution, or similar agreement securing project obligations may be applied annually to prepay the secured loan without penalty.
(B) USE OF PROCEEDS OF REFINANCING- The secured loan may be prepaid at any time without penalty from the proceeds of refinancing from non-Federal funding sources.
(d) SALE OF SECURED LOANS- As soon as practicable after substantial completion of a project, the Secretary shall sell to another entity or reoffer into the capital markets a secured loan for the project if the Secretary determines that the sale or reoffering can be made on favorable terms.
(e) LOAN GUARANTEES-
(1) IN GENERAL- The Secretary may provide a loan guarantee to a lender in lieu of making a secured loan if the Secretary determines that the budgetary cost of the loan guarantee is substantially the same as that of a secured loan.
(2) TERMS- The terms of a guaranteed loan shall be consistent with the terms set forth in this section for a secured 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. 1316. LINES OF CREDIT.
(a) IN GENERAL-
(1) AGREEMENTS- The Secretary may enter into agreements to make available lines of credit to 1 or more obligors in the form of direct loans to be made by the Secretary at future dates on the occurrence of certain events for any project selected under section 1314.
(2) USE OF PROCEEDS- The proceeds of a line of credit made available under this section shall be available to pay debt service on project obligations issued to finance eligible project costs, extraordinary repair and replacement costs, operation and maintenance expenses, and costs associated with unexpected Federal or State environmental restrictions.
(b) TERMS AND LIMITATIONS-
(1) IN GENERAL- A line of credit under this section with respect to a project shall be on such terms and conditions and contain such covenants, representations, warranties, and requirements (including requirements for audits) as the Secretary determines appropriate.
(2) MAXIMUM AMOUNTS-
(A) TOTAL AMOUNT- The total amount of the line of credit shall not exceed 33 percent of the reasonably anticipated eligible project costs.
(B) ONE-YEAR DRAWS- The amount drawn in any 1 year shall not exceed 20 percent of the total amount of the line of credit.
(3) DRAWS- Any draw on the line of credit shall represent a direct loan and shall be made only if net revenues from the project (including capitalized interest, any debt service reserve fund, and any other available reserve) are insufficient to pay [Struck out->] debt service on project obligations [<-Struck out] the costs specified in subsection (a)(2).
(4) INTEREST RATE- The interest rate on a direct loan resulting from a draw on the line of credit shall be [Struck out->] equal to [<-Struck out] not less than the yield on 30-year marketable United States Treasury securities as of the date on which the line of credit is obligated.
(5) SECURITY- The line of credit--
(A) shall be made available only in connection with a project obligation secured, in whole or in part, by a rate covenant, coverage requirement, or similar security feature or from a dedicated revenue stream; and
(B) may have a lien on revenues described in subparagraph (A) subject to any lien securing project obligations.
(6) PERIOD OF AVAILABILITY- The line of credit shall be available during the period beginning on the date of substantial completion of the project and ending not later than 10 years after that date.
(7) RIGHTS OF THIRD PARTY CREDITORS-
(A) AGAINST FEDERAL GOVERNMENT- A third party creditor of the obligor shall not have any right against the Federal Government with respect to any draw on the line of credit.
(B) ASSIGNMENT- An obligor may assign the line of credit to 1 or more lenders or to a trustee on the lenders' behalf.
(8) NONSUBORDINATION- A direct loan under this section shall not be subordinated to the claims of any holder of project obligations in the event of bankruptcy, insolvency, or liquidation of the obligor.
(9) FEES- The Secretary may establish fees at a level sufficient to cover the costs to the Federal Government of providing a line of credit under this section.
(10) RELATIONSHIP TO OTHER CREDIT INSTRUMENTS- A line of credit under this section shall not be issued for a project with respect to which another Federal credit instrument under this chapter is made available.
(c) REPAYMENT-
(1) SCHEDULE- The Secretary shall establish a repayment schedule for each direct loan under this section based on the projected cash flow from project revenues and other repayment sources.
(2) TIMING- All scheduled repayments of principal or interest on a direct loan under this section shall commence not later than 5 years after [Struck out->] substantial completion of the project [<-Struck out] the end of the period of availability specified in subsection (b)(6) and be fully repaid, with interest, by the date that is [Struck out->] 20 [<-Struck out] 25 years after the end of the period of availability specified in subsection (b)(6).
(3) SOURCES OF REPAYMENT FUNDS- The sources of funds for scheduled loan repayments under this section shall include tolls, user fees, or other dedicated revenue sources.
SEC. 1317. PROJECT SERVICING.
(a) REQUIREMENT- The State in which a project that receives financial assistance under this chapter is located may identify a local servicer to assist the Secretary in servicing the Federal credit instrument made available under this chapter.
(b) AGENCY; FEES- If a State identifies a local servicer under subsection (a), the local servicer--
(1) shall act as the agent for the Secretary; and
(2) may receive a servicing fee, subject to approval by the Secretary.
(c) LIABILITY- A local servicer identified under subsection (a) shall not be liable for the obligations of the obligor to the Secretary or any lender.
(d) ASSISTANCE FROM EXPERT FIRMS- The Secretary may retain the services of expert firms in the field of municipal and project finance to assist in the underwriting and servicing of Federal credit instruments.
SEC. 1318. 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 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 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. 1319. STATE AND LOCAL PERMITS.
The provision of financial assistance under this chapter with respect to a project shall not--
(1) relieve any recipient of the assistance of any obligation to obtain any required State or local permit or approval with respect to the project;
(2) limit the right of any unit of State or local government to approve or regulate any rate of return on private equity invested in the project; or
(3) otherwise supersede any State or local law (including any regulation) applicable to the construction or operation of the project.
SEC. 1320. REGULATIONS.
The Secretary may issue such regulations as the Secretary determines appropriate to carry out this chapter and the amendments made by this chapter.
SEC. 1321. FUNDING.
(a) AUTHORIZATION OF CONTRACT AUTHORITY-
(1) IN GENERAL- There shall be available from the Highway Trust Fund (other than the Mass Transit Account) to carry out this chapter--
(A) $60,000,000 for fiscal year 1998;
(B) $60,000,000 for fiscal year 1999;
(C) $90,000,000 for fiscal year 2000;
(D) $90,000,000 for fiscal year 2001;
(E) [Struck out->] $100,000,000 [<-Struck out] $115,000,000 for fiscal year 2002; and
(F) [Struck out->] $100,000,000 [<-Struck out] $115,000,000 for fiscal year 2003.
(2) ADMINISTRATIVE COSTS- From funds made available under paragraph (1), the Secretary may use, for the administration of this chapter, not more than $2,000,000 for each of fiscal years 1998 through 2003.
(3) AVAILABILITY- Amounts made available under paragraph (1) shall remain available until expended.
(b) CONTRACT AUTHORITY-
(1) IN GENERAL- Notwithstanding any other provision of law, approval by the Secretary of a Federal credit instrument that uses funds made available under this chapter shall be deemed to be acceptance by the United States of a contractual obligation to fund the Federal credit instrument.
(2) AVAILABILITY- Amounts authorized under this section for a fiscal year shall be available for obligation on October 1 of the fiscal year.
(c) LIMITATIONS ON CREDIT AMOUNTS- For each of fiscal years 1998 through 2003, principal amounts of Federal credit instruments made available under this chapter shall be limited to the amounts specified in the following table:
Fiscal Year: Maximum amount of credit: 1998 $1,200,000 1999 $1,200,000 2000 $1,800,000 2001 $1,800,000 2002 $2,000,000 2003 $2,000,000 SEC. 1322. REPORT TO CONGRESS.
Not later than 4 years after the date of enactment of this Act, the Secretary shall submit to Congress a report summarizing the financial performance of the projects that are receiving, or have received, assistance under this chapter, including a recommendation as to whether the objectives of this chapter are best served--
(1) by continuing the program under the authority of the Secretary;
(2) by establishing a Government corporation or Government-sponsored enterprise to administer the program; or
(3) by phasing out the program and relying on the capital markets to fund the types of infrastructure investments assisted by this chapter without Federal participation.
Transportation Infrastructure Credit Act of 1997 (H.R. 2330)
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.
TRANSPORTATION INFRASTRUCTURE CREDIT ACT
VS.
TRANSPORTATION INFRASTRUCTURE FINANCE AND INNOVATION ACT
TICA TIFIA $600 million federal investment over six years for projects of "national significance." $530 million federal investment over six years for projects of "national significance." Supports up to $12 billion in nominal amount of federal credit, and up to $36 billion in total investment. Supports up to $10 billion in nominal amount of federal credit, and up to $30 billion in total investment. Contains Direct Loans available through the U.S. Department of Transportation to cover up to one-third of the cost of a project. Contains Secured (Direct) Loans available through the U.S. Department of Transportation to cover up to one-third of the cost of a project. Contains Stand-by Lines of Credit that provide partial credit enhancement by making loans to pay debt service on project debt, if needed. This helps investors ensure that debt is covered during the first ten years after projects are constructed, when the revenue stream (tolls, user fees) is being established. Contains Stand-by Lines of Credit that provide partial credit enhancement by making loans to pay debt service on project debt, if needed. This helps investors ensure that debt is covered during the first ten years after projects are constructed, when the revenue stream (tolls, user fees) is being established. Contains Guaranteed Loans that would cover 100 percent of the principal and interest on the federal portion of project debt (up to one-third) of project costs.
Contains Guaranteed Loans that would cover 100 percent of the principal and interest on the federal portion of project debt (up to one-third) of project costs. Contains Development Cost Insurance that would insure up to 40 percent of projects' pre-construction costs, such as preliminary engineering and environmental impact studies. Contains no such provision. Draws upon existing budget authority to pay the "subsidy costs" of federal credit through each state's unobligated balances of Federal-aid highway trust funds. Draws upon new budget authority to pay the "subsidy costs" of federal credit. Establishes an Office of Infrastructure Finance within DOT to administer credit assistance. Establishes an Office of Infrastructure Finance within DOT to administer credit assistance.
