I 

116TH CONGRESS 

1ST SESSION H. R. 4905 

To direct the Secretary of Transportation to carry out a program to provide 

secured loans to private entities to carry out projects for the transportation of anthropogenic carbon dioxide, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 29, 2019 

Mrs. BUSTOS introduced the following bill; which was referred to the 

Committee on Transportation and Infrastructure 

A BILL 

To direct the Secretary of Transportation to carry out a 

program to provide secured loans to private entities to 

carry out projects for the transportation of anthropogenic 

carbon dioxide, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Investing in Energy 

5 Systems for the Transport of CO2 Act of 2019’’. 

6 SEC. 2. SENSE OF CONGRESS. 

7 It is the sense of Congress that each State should 

8 consider— 


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1 (1) qualifying all anthropogenic carbon dioxide 

2 pipelines as pollution control devices under the laws 

3 and regulations of such State; and 

4 (2) the establishment of a minimum of a 10- 

5 year waiver of ad valorem and property taxes for 

6 such pipelines. 

7 SEC. 3. CARBON TRANSPORT INFRASTRUCTURE FINANC8 ING PROGRAM. 

9 (a) IN GENERAL.—The Secretary of Transportation 

10 shall carry out a program to provide Federal credit instru11 ments to private entities to carry out projects for the con12 struction of common carrier pipelines for the transpor13 tation of anthropogenic carbon dioxide as a supercritical 

14 fluid. 

15 (b) APPLICATIONS.—To be eligible to receive assist16 ance under this section, an entity shall submit to the Sec17 retary an application at such time, in such manner, and 

18 containing such information as the Secretary may require. 

19 (c) PROJECTS ELIGIBLE FOR ASSISTANCE.—The fol20 lowing projects may be carried out with amounts made 

21 available under this section: 

22 (1) A project to construct, or increase the di23 ameter of, a common carrier trunk pipeline for the 

24 transportation of anthropogenic carbon dioxide as a 

25 supercritical fluid between one or more— 


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1 (A) carbon dioxide capture or production 

2 facilities; 

3 (B) carbon dioxide pipelines; 

4 (C) carbon dioxide storage facilities; or 

5 (D) carbon dioxide utilization facilities. 

6 (2) A project to construct common carrier feed7 er pipelines for the transportation of anthropogenic 

8 carbon dioxide as a supercritical fluid between cap9 ture, production, refining, or manufacturing facilities 

10 or qualified facilities and a trunk pipeline described 

11 in paragraph (1). 

12 (d) DETERMINATION OF ELIGIBILITY AND PROJECT

13 SELECTION.—To be eligible to receive financial assistance 

14 under this section, an entity shall meet the following cri15 teria, as determined by the Secretary: 

16 (1) CREDIT WORTHINESS.— 

17 (A) IN GENERAL.—The entity shall be 

18 creditworthy, as determined by the Secretary. 

19 (B) CONSIDERATIONS.—In determining 

20 the creditworthiness of an entity, the Secretary 

21 shall take into consideration relevant factors, 

22 including— 

23 (i) the terms, conditions, financial 

24 structure, and security features of the pro25 posed financing; 


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1 (ii) the dedicated revenue sources that 

2 will secure or fund the project obligations; 

3 (iii) the financial assumptions upon 

4 which the project is based; and 

5 (iv) the financial soundness and credit 

6 history of the entity. 

7 (C) SECURITY FEATURES.—The Secretary 

8 shall ensure that any financing for the project 

9 has appropriate security features, such as a 

10 rate covenant, supporting the project obliga11 tions to ensure repayment. 

12 (D) RATING OPINION LETTERS.— 

13 (i) PRELIMINARY RATING OPINION

14 LETTER.—The Secretary shall require each 

15 entity to provide, at the time of applica16 tion, a preliminary rating opinion letter 

17 from at least 1 rating agency indicating 

18 that the senior obligations of the project 

19 (which may be the Federal credit instru20 ment) have the potential to achieve an in21 vestment-grade rating. 

22 (ii) FINAL RATING OPINION LET23 TER.—The Secretary shall require each en24 tity to provide, prior to final acceptance 

25 and financing of the project, final rating 


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1 opinion letters from at least 2 rating agen2 cies indicating that the senior obligations 

3 of the project have an investment-grade 

4 rating. 

5 (2) PROPOSED PROJECT.—The Secretary shall 

6 ensure that any common carrier trunk pipeline con7 structed or increased under this section has, or is in8 creased to, an external diameter of not less than 30 

9 inches. 

10 (e) SELECTION OF PROJECTS.— 

11 (1) IN GENERAL.—In carrying out the program 

12 under subsection (a), the Secretary may not provide 

13 a secured loan to finance more than one common 

14 carrier trunk pipeline project the majority of the 

15 pipeline length of which will be constructed in a sin16 gle census region. 

17 (2) CENSUS REGION DEFINED.—For purposes 

18 of this section, the term ‘‘census region’’ means 1 of 

19 the 4 census regions (northeast, south, midwest, and 

20 west) that are designated as census regions by the 

21 Bureau of the Census as of the date of enactment 

22 of this Act. 

23 (3) PRIORITY.—In carrying out the program 

24 under subsection (a) for projects described in (c)(1), 

25 the Secretary shall give priority to applications that 


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1 propose construction of a common carrier trunk 

2 pipeline project in an area where pipelines or other 

3 linear infrastructure already exist. 

4 (f) SECURED LOANS.— 

5 (1) AGREEMENTS.— 

6 (A) IN GENERAL.—Subject to paragraphs 

7 (2) and (3), the Secretary may enter into agree8 ments with 1 or more entities to make secured 

9 loans, the proceeds of which shall be used to fi10 nance project costs of any project selected 

11 under this section. 

12 (B) FINANCIAL RISK ASSESSMENT.—Be13 fore entering into an agreement under this sub14 section for a secured loan, the Secretary, in 

15 consultation with the Director of the Office of 

16 Management and Budget and each rating agen17 cy providing a rating opinion letter under this 

18 section, shall determine an appropriate capital 

19 reserve subsidy amount for the secured loan, 

20 taking into account each such rating opinion 

21 letter. 

22 (C) INVESTMENT-GRADE RATING REQUIRE23 MENT.—The execution of a secured loan under 

24 this section shall be contingent on receipt by 


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1 the senior obligations of the project of an in2 vestment-grade rating. 

3 (2) TERMS AND LIMITATIONS.— 

4 (A) IN GENERAL.—A secured loan pro5 vided for a project under this section shall be 

6 subject to such terms and conditions, and con7 tain such covenants, representations, warran8 ties, and requirements (including requirements 

9 for audits), as the Secretary determines to be 

10 appropriate. 

11 (B) MAXIMUM AMOUNT.—The amount of a 

12 secured loan under this section shall not exceed 

13 80 percent of the reasonably anticipated project 

14 costs. 

15 (C) PAYMENT.—A secured loan under this 

16 section— 

17 (i) shall be payable, in whole or in 

18 part, from user fees or other dedicated rev19 enue sources that also secure the senior 

20 project obligations of the relevant project; 

21 (ii) shall include a rate covenant, cov22 erage requirement, or similar security fea23 ture supporting the project obligations; 

24 and 


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1 (iii) may have a lien on revenues de2 scribed in subparagraph (A), subject to 

3 any lien securing project obligations. 

4 (D) INTEREST RATE.—The interest rate 

5 on a secured loan under this section shall be 

6 not less than the yield on United States Treas7 ury securities of a similar maturity to the ma8 turity of the secured loan on the date of execu9 tion of the loan agreement. 

10 (E) MATURITY DATE.—The final maturity 

11 date of a secured loan under this section shall 

12 be the earlier of— 

13 (i) the date that is 35 years after the 

14 date of substantial completion of the rel15 evant project (as determined by the Sec16 retary); or 

17 (ii) if the useful life of the project (as 

18 determined by the Secretary) is less than 

19 35 years, the useful life the project. 

20 (F) NONSUBORDINATION.—A secured loan 

21 under this section shall not be subordinated to 

22 the claims of any holder of project obligations 

23 in the event of bankruptcy, insolvency, or liq24 uidation of the entity carrying out the project. 


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1 (G) FINANCING FEES.—On request of an 

2 entity, any fees to be paid by the entity under 

3 this section shall be financed as part of the 

4 loan. 

5 (3) REPAYMENT.— 

6 (A) SCHEDULE.—The Secretary shall es7 tablish a repayment schedule for each secured 

8 loan provided under this section, based on the 

9 projected cash flow from project revenues and 

10 other repayment sources. 

11 (B) COMMENCEMENT.—Scheduled loan re12 payments of principal or interest on a secured 

13 loan under this section shall commence not 

14 later than 5 years after the date of substantial 

15 completion of the project (as determined by the 

16 Secretary). 

17 (C) DEFERRED PAYMENTS.— 

18 (i) AUTHORIZATION.—If, at any time 

19 after the date of substantial completion of 

20 a project for which a secured loan is pro21 vided under this section, the project is un22 able to generate sufficient revenues to pay 

23 the scheduled loan repayments of principal 

24 and interest on the secured loan, the Sec25 retary subject to clause (iii), may allow the 


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1 entity to add unpaid principal and interest 

2 to the outstanding balance of the secured 

3 loan. 

4 (ii) INTEREST.—Any payment de5 ferred under clause (i) shall— 

6 (I) continue to accrue interest in 

7 accordance with paragraph (2)(D) 

8 until fully repaid; and 

9 (II) be scheduled to be amortized 

10 over the remaining term of the se11 cured loan. 

12 (iii) CRITERIA.— 

13 (I) IN GENERAL.—Any payment 

14 deferral under clause (i) shall be con15 tingent on the project meeting such 

16 criteria as the Secretary may estab17 lish. 

18 (II) REPAYMENT STANDARDS.— 

19 The criteria established under sub20 clause (I) shall include standards for 

21 reasonable assurance of repayment. 

22 (iv) PREPAYMENT.— 

23 (I) USE OF EXCESS REVE24 NUES.—Any excess revenues that re25 main after satisfying scheduled debt 


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1 service requirements on the project 

2 obligations and secured loan and all 

3 deposit requirements under the terms 

4 of any trust agreement, bond resolu5 tion, or similar agreement securing 

6 project obligations may be applied an7 nually to prepay a secured loan under 

8 this section without penalty. 

9 (II) USE OF PROCEEDS OF REFI10 NANCING.—A secured loan under this 

11 section may be prepaid at any time 

12 without penalty from the proceeds of 

13 refinancing from non-Federal funding 

14 sources. 

15 (4) SALE OF SECURED LOANS.— 

16 (A) IN GENERAL.—Subject to subpara17 graph (B), as soon as practicable after the date 

18 of substantial completion of a project and after 

19 providing a notice to the entity, the Secretary 

20 may sell to another entity or reoffer into the 

21 capital markets a secured loan for a project 

22 under this section, if the Secretary determines 

23 that the sale or reoffering can be made on fa24 vorable terms. 


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1 (B) CONSENT OF ENTITY.—In making a 

2 sale or reoffering under subparagraph (A), the 

3 Secretary may not change the original terms 

4 and conditions of the secured loan without the 

5 written consent of the entity. 

6 (5) LOAN GUARANTEES.— 

7 (A) IN GENERAL.—The Secretary may 

8 provide a loan guarantee to a lender in lieu of 

9 making a secured loan under this section, if the 

10 Secretary determines that the budgetary cost of 

11 the loan guarantee is substantially the same as 

12 that of a secured loan. 

13 (B) TERMS.—The terms of a loan guar14 antee provided under this paragraph shall be 

15 consistent with the terms established in this 

16 section for a secured loan, except that the rate 

17 on the guaranteed loan and any prepayment 

18 features shall be negotiated between the entity 

19 and the lender, with the consent of the Sec20 retary. 

21 (6) LIMITATION.—No project receiving Federal 

22 credit assistance under this section may be financed 

23 (directly or indirectly), in whole or in part, with pro24 ceeds of any obligation— 


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1 (A) the interest on which is exempt from 

2 the tax imposed under chapter 1 of the Internal 

3 Revenue Code of 1986; or 

4 (B) with respect to which credit is allow5 able under subpart I or J of part IV of sub6 chapter A of chapter 1 of such Code. 

7 (g) PROGRAM ADMINISTRATION.— 

8 (1) REQUIREMENT.—The Secretary shall estab9 lish a uniform system to service the Federal credit 

10 instruments made available under this section. 

11 (2) FEES.—The Secretary may collect and 

12 spend fees, contingent on authority being provided in 

13 appropriations Acts, at a level that is sufficient to 

14 cover— 

15 (A) the costs of expert firms retained 

16 under paragraph (4); and 

17 (B) all or a portion of the costs to the 

18 Federal Government of servicing the Federal 

19 credit instruments provided under this section. 

20 (3) SERVICER.— 

21 (A) IN GENERAL.—The Secretary may ap22 point a financial entity to assist the Secretary 

23 in servicing the Federal credit instruments pro24 vided under this section. 


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1 (B) DUTIES.—A servicer appointed under 

2 subparagraph (A) shall act as the agent for the 

3 Secretary. 

4 (C) FEE.—A servicer appointed under sub5 paragraph (A) shall receive a servicing fee, sub6 ject to approval by the Secretary. 

7 (4) ASSISTANCE FROM EXPERTS.—The Sec8 retary may retain the services, including counsel, of 

9 organizations and entities with expertise in the field 

10 of project finance to assist in the underwriting and 

11 servicing of Federal credit instruments provided 

12 under this section. 

13 (h) STATUTORY CONSTRUCTION.—Nothing in this 

14 section shall be construed to— 

15 (1) supersede the applicability of other require16 ments of Federal law (including regulations); 

17 (2) relieve any recipient of financial assistance 

18 under this section of any obligation to obtain any re19 quired State, local, or tribal permit or approval with 

20 respect to the project; 

21 (3) limit the right of any unit of State, local, 

22 or tribal government to approve or regulate any rate 

23 of return on private equity invested in the project; 

24 or 


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1 (4) otherwise supersede any State, local, or 

2 tribal law (including any regulation) applicable to 

3 the construction or operation of the project. 

4 (i) PREVAILING RATE OF WAGE.— 

5 (1) IN GENERAL.—The Secretary shall ensure 

6 that laborers and mechanics employed by contractors 

7 and subcontractors on a project financed in whole or 

8 in part by a Federal credit instrument made avail9 able under this section will be paid wages at rates 

10 not less than those prevailing on similar construction 

11 in the locality, as determined by the Secretary of 

12 Labor under subchapter IV of chapter 31 of title 40. 

13 (2) AUTHORITY OF SECRETARY OF LABOR.— 

14 With respect to the labor standards specified in 

15 paragraph (1), the Secretary of Labor shall have, 

16 with respect to the labor standards specified in this 

17 subsection, the authority and functions set forth in 

18 Reorganization Plan Numbered 14 of 1950 (15 F.R. 

19 3176) and section 3145 of title 40, United States 

20 Code. 

21 (j) REGULATIONS.—The Secretary may issue such 

22 regulations as the Secretary determines appropriate to 

23 carry out this section. 

24 (k) USE OF AMERICAN IRON, STEEL, AND MANUFAC25 TURED GOODS.— 


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1 (1) IN GENERAL.—Except as provided by para2 graph (2), the Secretary shall make available a Fed3 eral credit instrument for a project under this sec4 tion only if all of the iron, steel, and manufactured 

5 goods used in the project are produced in the United 

6 States. 

7 (2) EXCEPTION.—Upon the submission of a re8 quest for a waiver of the requirements under para9 graph (1) by an entity, the Secretary may waive 

10 paragraph (1) if the Secretary finds that— 

11 (A) applying paragraph (1) would be in12 consistent with the public interest; 

13 (B) iron, steel, and the relevant manufac14 tured goods are not produced in the United 

15 States in sufficient and reasonably available 

16 quantities and of a satisfactory quality; or 

17 (C) inclusion of iron, steel, and manufac18 tured goods produced in the United States will 

19 increase the cost of the overall project by more 

20 than 25 percent. 

21 (3) WRITTEN WAIVER DETERMINATION AND

22 ANNUAL REPORT.— 

23 (A) IN GENERAL.—If the Secretary re24 ceives a request for a waiver under this sub25 section, the Secretary shall— 


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1 (i) make available to the public on an 

2 informal basis a copy of the request and 

3 information available to the Secretary con4 cerning the request; and 

5 (ii) allow for informal public input on 

6 the request for at least 15 days prior to 

7 making a finding based on the request. 

8 (B) REQUIREMENT.—The Secretary shall 

9 make the request and accompanying informa10 tion required under subparagraph (A) available 

11 by electronic means, including on website of the 

12 Department of Energy. 

13 (4) CONSISTENT WITH OBLIGATIONS.—This 

14 subsection shall be applied in a manner consistent 

15 with the United States obligations under inter16 national agreements. 

17 (l) DEFINITIONS.—In this section: 

18 (1) FEDERAL CREDIT INSTRUMENT.—The term 

19 ‘‘Federal credit instrument’’ means a secured loan 

20 or loan guarantee authorized to be made available 

21 under this section with respect to a project. 

22 (2) QUALIFIED FACILITY.—The term ‘‘qualified 

23 facility’’ has the meaning given the term in section 

24 45Q of the Internal Revenue Code of 1986 (26 

25 U.S.C. 45Q). 


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1 (3) INVESTMENT-GRADE RATING.—The term 

2 ‘‘investment-grade rating’’ means a rating of BBB 

3 minus, Baa3, bbb minus, BBB (low) or higher as4 signed by a rating agency to project obligations. 

5 (4) LENDER.— 

6 (A) IN GENERAL.—The term ‘‘lender’’ 

7 means any non-Federal qualified institutional 

8 buyer (as defined in section 230.144A(a) of 

9 title 17, Code of Federal Regulations (or a suc10 cessor regulation), known as Rule 144A(a) of 

11 the Securities and Exchange Commission and 

12 issued under the Securities Act of 1933 (15 

13 U.S.C. 77a et seq.)). 

14 (B) INCLUSION.—The term ‘‘lender’’ in15 cludes— 

16 (i) a qualified retirement plan (as de17 fined in section 4974(c) of the Internal 

18 Revenue Code of 1986 (26 U.S.C. 

19 4974(c))) that is a qualified institutional 

20 buyer; and 

21 (ii) a governmental plan (as defined in 

22 section 414(d) of the Internal Revenue 

23 Code of 1986 (26 U.S.C. 414(d))) that is 

24 a qualified institutional buyer. 


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1 (5) LOAN GUARANTEE.—The term ‘‘loan guar2 antee’’ means any guarantee or other pledge by the 

3 Secretary to pay all or part of the principal of, and 

4 interest on, a loan or other debt obligation issued by 

5 an entity and funded by a lender. 

6 (6) PRODUCED IN THE UNITED STATES.—The 

7 term ‘‘produced in the United States’’ means, in the 

8 case of iron or steel, that all manufacturing proc9 esses, including the application of a coating, must 

10 occur in the United States. 

11 (7) PROJECT OBLIGATION.— 

12 (A) IN GENERAL.—The term ‘‘project obli13 gation’’ means any note, bond, debenture, or 

14 other debt obligation issued by an entity in con15 nection with the financing of a project. 

16 (B) EXCLUSION.—Such term does not in17 clude a Federal credit instrument. 

18 (8) RATING AGENCY.—The term ‘‘rating agen19 cy’’ means a credit rating agency registered with the 

20 Securities and Exchange Commission as a nationally 

21 recognized statistical rating organization (as defined 

22 in section 3(a) of the Securities Exchange Act of 

23 1934 (15 U.S.C. 78c(a))). 

24 (9) SECURED LOAN.—The term ‘‘secured loan’’ 

25 means a direct loan or other debt obligation issued 


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1 by an entity and funded by the Secretary in connec2 tion with the financing of a project under this sec3 tion. 

4 (10) STATE.—The term ‘‘State’’ means— 

5 (A) a State; 

6 (B) the District of Columbia; 

7 (C) the Commonwealth of Puerto Rico; 

8 and 

9 (D) any other territory or possession of the 

10 United States. 

11 (11) SUBSIDY AMOUNT.—The term ‘‘subsidy 

12 amount’’ means the amount of budget authority suf13 ficient to cover the estimated long-term cost to the 

14 Federal Government of a Federal credit instrument, 

15 as calculated on a net present value basis, excluding 

16 administrative costs and any incidental effects on 

17 governmental receipts or outlays in accordance with 

18 the Federal Credit Reform Act of 1990 (2 U.S.C. 

19 661 et seq.). 

20 (12) SUBSTANTIAL COMPLETION.—The term 

21 ‘‘substantial completion’’, with respect to a project, 

22 means the earliest date on which a project is consid23 ered to perform the functions for which the project 

24 is designed. 

25 (m) AUTHORIZATION OF APPROPRIATIONS.— 


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1 (1) IN GENERAL.—There are authorized to be 

2 appropriated— 

3 (A) $400,000,000 to carry out projects de4 scribed in subsection (c)(1); and 

5 (B) $100,000,000 to carry out projects de6 scribed in subsection (c)(2). 

7 (2) AVAILABLE UNTIL EXPENDED.—Any funds 

8 appropriated pursuant to paragraph (1) are author9 ized to remain available until expended. 

10 (3) ADMINISTRATIVE COSTS.—Of the funds 

11 made available to carry out this section, the Sec12 retary may use for the administration of this sec13 tion, including for the provision of technical assist14 ance to aid project sponsors in obtaining the nec15 essary approvals for the project, not more than 

16 $2,000,000 for each fiscal year. 

Æ 


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