I 

108TH CONGRESS 

2D SESSION H. R. 3715

To facilitate efficient investments and financing of infrastructure projects 

and new job creation through the establishment of a National Infrastructure Development Corporation, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 21, 2004

Ms. DELAURO (for herself, Mr. FROST, and Mr. OWENS) introduced the following bill; which was referred to the Committee on Transportation and 

Infrastructure, and in addition to the Committees on Financial Services, 

and Ways and Means, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

A BILL

To facilitate efficient investments and financing of infrastructure projects and new job creation through the establishment of a National Infrastructure Development Corporation, 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 ‘‘National Infrastruc5 ture Development Act of 2004’’. 
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1 SEC. 2. FINDINGS. 

2 Congress hereby finds the following: 

3 (1) According to the American Society of Civil 

4 Engineers, the condition of our nation’s roads, 

5 bridges, drinking water systems, and other public 

6 works are facing a shortfall of $1,600,000,000,000 

7 investment to bring conditions to acceptable levels. 

8 (2) Highway vehicle miles traveled increased 

9 600,000,000,000 over the past decade from 

10 2,150,000,000,000 to 2,750,000,000,000. According 

11 to the American Association of State Highway and 

12 Transportation Officials, highway vehicle miles trav13 eled is expected to grow by another 600,000,000,000 

14 over the next 10 years, an annual highway vehicle 

15 miles traveled growth rate of 2.2 percent. 

16 (3) According to the American Public Transit 

17 Association, public transportation ridership has in18 creased 22 percent since 1998—the highest level in 

19 40 years. 

20 (4) Airport capacity had increased only 1 per21 cent from 1991 to 2001, yet air traffic had in22 creased 35 percent during that same time period. 

23 (5) As of 2000, 27.5 percent of the nation’s 

24 bridges (162,000 bridges) were structurally deficient 

25 or functionally obsolete. 
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1 (6) According to recent estimates by the Envi2 ronmental Protection Agency, as much as 

3 $390,000,000,000 will be needed over the next 2 

4 decades to rebuild, repair, and upgrade the Nation’s 

5 wastewater treatment plants. 

6 (7) According to the Federal Highway Adminis7 tration’s ‘‘2003 Conditions and Performance Re8 port’’, traffic congestion costs the economy 

9 $67,500,000,000 annually in lost productivity and 

10 wasted fuel. 

11 (8) Every billion dollars of Federal highway in12 vestment generates 47,500 jobs; for every billion dol13 lars in transit investment, job generation is virtually 

14 the same. 

15 (9) 11.3 million Americans—one in 11—are 

16 employed in transportation occupations. 

17 (10) As expressed in Executive Order No. 

18 12893 of January 26, 1994, which sets out guiding 

19 principles for Federal infrastructure investments, a 

20 well functioning infrastructure is vital to sustained 

21 economic growth, to the quality of life of our com22 munities, and to the protection of our environment 

23 and natural resources. 

24 (11) Although grant programs of the Federal 

25 Government must continue to play a central role in 
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1 financing the infrastructure needs of the Nation, 

2 current and foreseeable demands on existing Fed3 eral, State, and local funding for infrastructure ex4 pansion and replacement exceed the resources to 

5 support these programs by margins wide enough to 

6 prompt serious concerns about the Nation’s ability 

7 to sustain long-term economic development, produc8 tivity, and international competitiveness. 

9 (12) The private capital markets, including the 

10 trillions in capital held by institutional investors, 

11 such as pension funds, have a growing interest in 

12 public-private infrastructure investment opportuni13 ties that can produce competitive risk-adjusted rates 

14 of return. 

15 SEC. 3. PURPOSES. 

16 The purposes of this Act are as follows: 

17 (1) To establish the National Infrastructure 

18 Development Corporation for the purpose of making 

19 new sources of financing available for the develop20 ment of infrastructure facilities, and to facilitate the 

21 use and issuance of public benefit bonds. 

22 (2) To establish a subsidiary of the Corpora23 tion, the National Infrastructure Insurance Corpora24 tion, to issue insurance, reinsurance and related un25 dertakings in respect of the issuance of obligations 
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1 related to the development of infrastructure facili2 ties. 

3 (3) To establish a category of financial instru4 ment to be known as ‘‘public benefit bonds’’ de5 signed to help facilitate pension plan investment in 

6 the development of infrastructure facilities. 

7 SEC. 4. DEFINITIONS. 

8 The following definitions shall apply for purposes of 

9 this Act unless the context requires otherwise: 

10 (1) CORPORATION.—The term ‘‘Corporation’’ 

11 means the National Infrastructure Development 

12 Corporation established under section 5(a). 

13 (2) DEVELOPMENT.—The terms ‘‘development’’ 

14 and ‘‘develop’’ mean, with respect to an infrastruc15 ture facility, any—

16 (A) preconstruction planning, feasibility re17 view, permitting and design work and other 

18 preconstruction activities; 

19 (B) construction, reconstruction, rehabili20 tation, replacement, or expansion; and 

21 (C) operation and maintenance. 

22 (3) ENTITY.—The term ‘‘entity’’ means an in23 dividual, corporation, partnership, joint venture, 

24 trust or governmental entity or instrumentality. 
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1 (4) INFRASTRUCTURE FACILITY.—The term 

2 ‘‘infrastructure facility’’ means a road, highway, 

3 bridge, tunnel, airport, mass transportation vehicle 

4 or system, passenger or freight rail vehicle or sys5 tem, intermodal transportation facility, waterway, 

6 commercial port, drinking or waste water treatment 

7 facility, solid waste disposal facility, pollution control 

8 system, hazardous waste facility, federally des9 ignated national information highway facility, school, 

10 and any ancillary facility which forms a part of any 

11 such facility or is reasonably related to such facility, 

12 whether owned, leased or operated by a public entity 

13 or a private entity or by a combination of such enti14 ties, and the financing or refinancing of the develop15 ment of which is, or will be, supported in whole or 

16 in part by user fees or other dedicated revenue 

17 sources. 

18 (5) INSURANCE CORPORATION.—The term ‘‘In19 surance Corporation’’ means the National Infra20 structure Insurance Corporation established pursu21 ant to section 5(b). 

22 (6) NIC.—The term ‘‘NIC’’ means the Cor23 poration and all subsidiaries of the Corporation. 

24 (7) PENSION PLAN.—The term ‘‘pension plan’’ 

25 means a pension plan as defined in section 3(2) of 
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1 the Employee Retirement Income Security Act of 

2 1974 (29 U.S.C. 1001 et seq.), including any public 

3 pension plan. 

4 (8) PUBLIC BENEFIT BOND.—The term ‘‘public 

5 benefit bond’’ means a bond or other indebtedness 

6 meeting the requirements of section 72(w) of the In7 ternal Revenue Code of 1986. 

8 (9) PUBLIC-PRIVATE PARTNERSHIP.—The term 

9 ‘‘public-private partnership’’ means any entity—

10 (A) which is undertaking the development 

11 of all or part of any infrastructure facility—

12 (i) pursuant to requirements estab13 lished in 1 or more contracts between such 

14 entity and a State or an instrumentality of 

15 a State; or 

16 (ii) the activities of which with respect 

17 to such facility are subject to regulation by 

18 a State or any instrumentality of a State; 

19 and 

20 (B) which owns, leases, or operates, or will 

21 own, lease, or operate, such infrastructure facil22 ity in whole or in part, and at least 1 of the 

23 participants in such entity is a nongovern24 mental entity. 
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1 (10) REVOLVING FUND.—The term ‘‘revolving 

2 fund’’ means a fund or program established by a 

3 State or a political subdivision or instrumentality of 

4 a State, the principal activity of which is to make 

5 loans, commitments, or other financial accommoda6 tion available for the development of 1 or more cat7 egories of infrastructure facilities. 

8 (11) SECRETARY.—The term ‘‘Secretary’’ 

9 means the Secretary of the Treasury or the designee 

10 of the Secretary. 

11 (12) STATE.—The term ‘‘State’’ includes the 

12 District of Columbia, Puerto Rico, Guam, American 

13 Samoa, the Trust Territories of the Pacific Islands, 

14 the Virgin Islands, the Northern Mariana Islands, 

15 and any territory of the United States. 

16 (13) TRANSITION DATE.—The term ‘‘transition 

17 date’’ means the date on which the voting common 

18 stock of the Corporation owned by the Secretary is 

19 fully repurchased or converted in accordance with 

20 section 13 and the transition of the Corporation to 

21 a government-sponsored enterprise in accordance 

22 with such section is completed. 

23 SEC. 5. ESTABLISHMENT OF NIC. 

24 (a) ESTABLISHMENT OF NATIONAL INFRASTRUC25 TURE DEVELOPMENT CORPORATION.—The National In-
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1 frastructure Development Corporation is hereby estab2 lished as a wholly owned Government corporation subject 

3 to chapter 91 of title 31, United States Code (commonly 

4 referred to as the ‘‘Government Corporation Control 

5 Act’’), except as otherwise provided in this Act. 

6 (b) ESTABLISHMENT OF NATIONAL INFRASTRUC7 TURE INSURANCE CORPORATION.—The National Infra8 structure Insurance Corporation is hereby established as 

9 a subsidiary of the Corporation and as a wholly owned 

10 Government corporation subject to chapter 91 of title 31, 

11 United States Code, except as otherwise provided in this 

12 Act. 

13 (c) SELF-SUPPORTING ENTITIES.—The Corporation 

14 and the Insurance Corporation shall each conduct their 

15 respective businesses as self-supporting entities. 

16 SEC. 6. CORPORATION’S POWERS AND LIMITATIONS. 

17 (a) GENERAL POWERS.—In order to carry out the 

18 purposes of the Corporation as set forth in this Act, the 

19 Corporation shall have the following powers: 

20 (1) To make senior and subordinated loans and 

21 purchase senior and subordinated debt securities 

22 (both taxable and tax exempt) and equity securities, 

23 and enter into a binding commitment to make any 

24 such loan or purchase any such security, on such 

25 terms as the Corporation may determine, in the Cor-
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1 poration’s discretion, to be appropriate, the proceeds 

2 of which are to be used to finance or refinance the 

3 development of 1 or more infrastructure facilities, 

4 and subject to the provisions of paragraph (8) of 

5 subsection (b), provide preconstruction phase assist6 ance in accordance with section 8(f). 

7 (2) To issue and sell debt securities and voting 

8 and nonvoting equity securities of the Corporation 

9 on such terms as the board of directors of the Cor10 poration may determine, subject to the provisions of 

11 paragraphs (2), (3), and (4) of subsection (b), to be 

12 appropriate and to pay such dividends on any out13 standing stock as the board of directors shall deter14 mine from time to time. 

15 (3) To make the determinations with respect to 

16 public benefit bonds pursuant to section 72(w) of 

17 the Internal Revenue Code of 1986. 

18 (4) To make agreements and contracts with any 

19 entity in furtherance of the business of the Corpora20 tion. 

21 (5) To make use of the services, facilities, and 

22 property of any Federal agency or instrumentality, 

23 with the approval of such agency or instrumentality 

24 and on a reimbursable basis, in carrying out the 

25 purposes of this Act. 
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1 (6) To acquire, lease, pledge, exchange, and dis2 pose of real and personal property and otherwise ex3 ercise all the usual incidents of ownership of prop4 erty to the extent the exercise of such powers are ap5 propriate to and consistent with the purposes of the 

6 Corporation. 

7 (7) To sue and be sued in the Corporation’s 

8 corporate capacity in any court of competent juris9 diction, except that no attachment, injunction, or 

10 similar process, mesne or final, may be issued 

11 against the property of the Corporation or against 

12 the Corporation with respect to such property. 

13 (8) To indemnify the directors and officers of 

14 the Corporation for liabilities arising out of the ac15 tions of the directors and officers in such capacity, 

16 in accordance with, and subject to the limitations 

17 contained in, the bylaws of the Corporation. 

18 (9) To exercise all other lawful powers which 

19 are necessary or appropriate to carry out, and are 

20 consistent with, the purposes of the Corporation, in21 cluding the powers conferred upon a corporation by 

22 the District of Columbia Business Corporation Act. 

23 (b) LIMITATIONS ON THE CORPORATION.—

24 (1) ACTIONS CONSISTENT WITH SELF-SUP25 PORTING ENTITY STATUS.—The Corporation shall 
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1 conduct its business in a manner consistent with the 

2 requirement of section 5(c). 

3 (2) CONDITION ON DEBT ISSUANCE.—The Cor4 poration shall not issue any debt security under sub5 section (a)(2) unless, at the time of the issuance 

6 thereof, such security is rated by a nationally recog7 nized statistical rating organization at 1 of the 3 

8 highest ratings of such organization. 

9 (3) LIMITATION AND CONDITION ON ISSUANCE

10 OF DEBT AND NONVOTING EQUITY SECURITIES.—

11 (A) IN GENERAL.—Before the transition 

12 date, the Corporation shall not issue any debt 

13 security or nonvoting equity security under sub14 section (a)(2) without the prior consent of the 

15 Secretary. 

16 (B) APPROVAL OF SECRETARY FOR DEBT

17 SECURITY AFTER TRANSITION DATE.—On and 

18 after the transition date, the Corporation shall 

19 not issue any debt security under subsection 

20 (a)(2) without the prior consent of the Sec21 retary. 

22 (4) CONDITION ON VOTING EQUITY

23 ISSUANCE.—Before the transition date, the Corpora24 tion shall not issue any voting security to any entity 

25 other than the Secretary, and, on and after the tran-
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1 sition date, the issuance of any such security shall 

2 be subject to the provisions of section 13. 

3 (5) SALE OF VOTING SECURITIES OF THE IN4 SURANCE CORPORATION.—Before the transition 

5 date, voting securities of the Insurance Corporation 

6 purchased by the Corporation may not be sold or 

7 otherwise transferred by the Corporation. 

8 (6) INVESTMENTS CONSISTENT WITH PURPOSES

9 OF CORPORATION.—In order to achieve the Corpora10 tion’s purpose of effectively leveraging limited Fed11 eral resources with other public and private sources 

12 of capital, the Corporation shall seek to maintain a 

13 significant proportion of the Corporation’s infra14 structure investments in—

15 (A) subordinated securities; and 

16 (B) securities issued with respect to infra17 structure facilities developed by public-private 

18 partnerships. 

19 (7) COORDINATION WITH STATE AND LOCAL

20 REGULATORY AUTHORITY.—The provision of finan21 cial assistance by the Corporation pursuant to this 

22 Act shall not be construed as—

23 (A) limiting the right of any State or local 

24 authority to approve or regulate rates of return 

25 on private equity invested in a project; or 
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1 (B) otherwise superseding any State law or 

2 regulation applicable to a project. 

3 (8) LIMITATION ON PRECONSTRUCTION ASSIST4 ANCE.—The Corporation shall provide assistance in 

5 connection with the development of any infrastruc6 ture facility during the facility’s preconstruction 

7 phase only in accordance with section 8(f). 

8 SEC. 7. INSURANCE CORPORATION’S POWERS AND LIMITA9 TIONS. 

10 (a) GENERAL POWERS.—In order to carry out the 

11 purposes of the Insurance Corporation as set forth in this 

12 Act, the Insurance Corporation shall have the following 

13 powers: 

14 (1) To insure and reinsure bonds, debentures, 

15 notes, debt instruments, loans, and any interest in 

16 any such obligation or loan, the proceeds of which 

17 are to be used to finance or refinance the develop18 ment of 1 or more infrastructure facilities. 

19 (2) To insure leases of personal, real, or mixed 

20 property with respect to infrastructure facilities. 

21 (3) To issue letters of credit and undertake 

22 such obligations and commitments as the Insurance 

23 Corporation deems necessary to carry out the pur24 poses described in paragraphs (1) and (2). 
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1 (4) To issue and sell voting and nonvoting eq2 uity securities on such terms as the board of direc3 tors of the Insurance Corporation may determine, 

4 subject to the provisions of paragraphs (5) and (6) 

5 of subsection (b), to be appropriate and to pay divi6 dends on any outstanding stock as the board of di7 rectors of the Insurance Corporation shall determine 

8 from time to time. 

9 (5) To make agreements and contracts with any 

10 entity in furtherance of the business of the Insur11 ance Corporation. 

12 (6) To make use of the services, facilities, and 

13 property of any Federal agency or instrumentality, 

14 with the approval of such agency or instrumentality 

15 and on a reimbursable basis, in carrying out the 

16 purposes of this Act. 

17 (7) To acquire, lease, pledge, exchange, and dis18 pose of real and personal property and otherwise ex19 ercise all the usual incidents of ownership of prop20 erty to the extent the exercise of such powers are ap21 propriate to and consistent with the purposes of the 

22 Insurance Corporation. 

23 (8) To sue and be sued in the Insurance Cor24 poration’s corporate capacity in any court of com25 petent jurisdiction, except that no attachment, in-
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1 junction, or similar process, mesne or final, may be 

2 issued against the property of the Insurance Cor3 poration or against the Insurance Corporation with 

4 respect to such property. 

5 (9) To indemnify the directors and officers of 

6 the Insurance Corporation for liabilities arising out 

7 of the actions of the directors and officers in such 

8 capacity, in accordance with, and subject to the limi9 tations contained in, the bylaws of the Insurance 

10 Corporation. 

11 (10) To exercise all other lawful powers which 

12 are necessary or appropriate to carry out, and are 

13 consistent with, the purposes of the Insurance Cor14 poration, including the powers conferred upon a cor15 poration by the District of Columbia Business Cor16 poration Act. 

17 (b) LIMITATIONS ON THE INSURANCE CORPORA18 TION.—

19 (1) ACTIONS CONSISTENT WITH SELF-SUP20 PORTING ENTITY STATUS.—The Insurance Corpora21 tion shall conduct its business in a manner con22 sistent with the requirement of section 5(c). 

23 (2) INSURANCE CORPORATION RATING RE24 QUIREMENT.—The Insurance Corporation shall not 

25 issue any primary insurance or letter of credit with 
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1 respect to 1 or more infrastructure facilities unless, 

2 at the time of such issuance, the Insurance Corpora3 tion’s claims-paying ability is then rated by a nation4 ally recognized statistical rating organization at the 

5 highest rating of such organization. 

6 (3) LIMITATION ON REINSURANCE.—The Insur7 ance Corporation may write reinsurance in respect 

8 of all or a portion of a primary insurance policy with 

9 respect to 1 or more infrastructure facilities issued 

10 by a bond insurer if the claims-paying ability of such 

11 insurer is rated, at the time of issuance of such rein12 surance, by a nationally recognized statistical rating 

13 organization at the highest rating of such organiza14 tion. 

15 (4) LIMITATION ON INSURANCE AND OTHER AC16 TIVITIES.—The Insurance Corporation may issue 

17 primary insurance or a letter of credit with respect 

18 to 1 or more infrastructure facilities, except that not 

19 less than 75 percent of the principal amount of all 

20 obligations so insured or subject of a letter of credit 

21 shall be obligations which are, or based on a pub22 lished or indicative rating would be, without such in23 surance or letter of credit, rated by a nationally rec24 ognized statistical rating organization in the fourth 
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1 or fifth rating categories of such organization (BBB 

2 and BB; Baa and Ba, or their equivalents). 

3 (5) PRIOR CONSENT OF SECRETARY.—Before 

4 the transition date, the Insurance Corporation shall 

5 not issue any nonvoting equity security under sub6 section (a)(4) without the prior consent of the Sec7 retary. 

8 (6) CONDITION ON VOTING EQUITY

9 ISSUANCE.—Before the transition date, the Insur10 ance Corporation shall not issue any voting security 

11 to any entity other than the Corporation. 

12 (7) COORDINATION WITH STATE AND LOCAL

13 REGULATORY AUTHORITY.—The provision of finan14 cial assistance by the Insurance Corporation pursu15 ant to this Act shall not be construed as—

16 (A) limiting the right of any State or local 

17 authority to approve or regulate rates of return 

18 on private equity invested in a project; or 

19 (B) otherwise superseding any State law or 

20 regulation applicable to a project. 

21 SEC. 8. ELIGIBILITY CRITERIA FOR ASSISTANCE FROM THE 

22 CORPORATION AND THE INSURANCE COR23 PORATION. 

24 (a) GENERAL.—No financial assistance shall be avail25 able under this Act from the Corporation or the Insurance 
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1 Corporation unless the applicant for such assistance has 

2 demonstrated to the satisfaction of the Corporation or the 

3 Insurance Corporation, as the case may be, that the 

4 project for which such assistance is being sought meets—

5 (1) the requirements of this Act; and 

6 (2) any criteria established in accordance with 

7 this Act by the board of directors of the Corporation 

8 or the Insurance Corporation, as the case may be. 

9 (b) ESTABLISHMENT OF PROJECT CRITERIA.—

10 (1) IN GENERAL.—Consistent with the require11 ments of subsections (c) and (d), the boards of di12 rectors of the Corporation and the Insurance Cor13 poration shall each establish—

14 (A) criteria for determining eligibility for 

15 financial assistance under this Act; 

16 (B) disclosure and application procedures 

17 to be followed by States, revolving funds, and 

18 other entities to nominate projects for assist19 ance under this Act; and 

20 (C) such other criteria as the board of di21 rectors of the Corporation or the Insurance 

22 Corporation may consider to be appropriate for 

23 purposes of carrying out this Act. 

24 (2) FACTORS TO BE TAKEN INTO ACCOUNT.—

25 The criteria established pursuant to paragraph 
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1 (1)(A) shall provide for the consideration of the fol2 lowing factors in considering eligibility for financial 

3 assistance under this Act: 

4 (A) The extent to which provision of assist5 ance by the Corporation or the Insurance Cor6 poration will further the objectives for infra7 structure investments established in Executive 

8 Order No. 12893 of January 26, 1994, includ9 ing the stated objective of providing opportuni10 ties for ‘‘innovative public-private initiatives’’. 

11 (B) The means by which development of 

12 the infrastructure facility under consideration is 

13 being financed, including—

14 (i) the terms and conditions and fi15 nancial structure of the proposed financ16 ing; 

17 (ii) the financial assumptions and pro18 jections on which the project is based; and 

19 (iii) based on consideration of clauses 

20 (i) and (ii), whether the infrastructure fa21 cility will have the capacity to be self-sup22 porting. 

23 (C) The likelihood that the provision of as24 sistance by the Corporation or the Insurance 

25 Corporation will cause such development to pro-
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1 ceed more promptly and with lower costs for fi2 nancing to the public and private entities en3 gaged in developing such infrastructure facility 

4 than would be the case without such assistance. 

5 (D) The extent to which the provision of 

6 assistance by the Corporation or the Insurance 

7 Corporation maximizes the level of private in8 vestment in such infrastructure facility. 

9 (3) LIMITATION ON CONDITIONS.—The Cor10 poration and the Insurance Corporation shall not 

11 condition the approval of financial assistance for the 

12 development of any infrastructure facility on a re13 quirement that a pension plan of a State or political 

14 subdivision of a State make an investment in such 

15 facility. 

16 (c) SUBMISSION OF PROJECT PROPOSALS.—

17 (1) ACCEPTANCE OF PROPOSALS.—The Cor18 poration and the Insurance Corporation shall accept, 

19 for consideration, project proposals relating to the 

20 development of infrastructure facilities submitted by 

21 a State, a revolving fund, or another entity, subject 

22 to subsection (d), which meet the requirements of 

23 subsection (b). 

24 (2) LIST OF PROJECTS UNDER CONSIDERATION

25 FOR ASSISTANCE.—Project proposals accepted pur-
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1 suant to paragraph (1) and approved in principle 

2 shall be placed on a list of projects being considered 

3 for financial assistance under this Act. 

4 (3) ELIGIBILITY FOR PRECONSTRUCTION AS5 SISTANCE.—Projects on the list established pursuant 

6 to paragraph (2) shall be eligible to apply for 

7 preconstruction assistance in accordance with sub8 section (f). 

9 (4) SUBSEQUENT APPROVALS.—Notwith10 standing the receipt of any preconstruction assist11 ance for any project, no additional financial assist12 ance under this Act for such project may be pro13 vided without the specific approval by the Corpora14 tion or the Insurance Corporation, as the case may 

15 be, for such additional assistance. 

16 (5) FEES.—A fee may be charged for the re17 view of any project proposal in such amount as may 

18 be deemed appropriate by the Corporation or the In19 surance Corporation to cover the cost of such review. 

20 (d) STATE ELIGIBILITY.—

21 (1) IN GENERAL.—After the end of the 3-year 

22 period beginning on the date of the enactment of 

23 this Act, no financial assistance may be provided by 

24 the Corporation or the Insurance Corporation for 

25 the development of any infrastructure facility pro-
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1 posed for assistance by a State, or a revolving fund 

2 in a State, unless such State has in place—

3 (A) an evaluation process which is certified 

4 by the Secretary, in accordance with regulations 

5 which the Secretary shall prescribe before the 

6 end of the 6-month period beginning on such 

7 date of enactment, as being designed to ascer8 tain the extent to which major work with re9 spect to infrastructure facilities within the 

10 State can be financed by relying on any revenue 

11 reasonably obtainable from such facilities and 

12 other dedicated revenue sources; and 

13 (B) a program which is certified by the 

14 Secretary, in accordance with regulations which 

15 the Secretary shall prescribe before the end of 

16 such 6-month period, as being reasonably de17 signed to promote the objective set forth in Ex18 ecutive Order No. 12893 of January 26, 1994, 

19 of affording the opportunity for innovative pub20 lic-private initiatives with respect to major 

21 work, consistent with the public interest. 

22 (2) ACTIVITIES WITH NONSTATE ENTITIES.—

23 After the end of the 3-year period beginning on the 

24 date of the enactment of this Act, the Corporation 

25 and the Insurance Corporation each may continue to 
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1 undertake activities with respect to projects within a 

2 State relating to the development of infrastructure 

3 facilities which have been submitted by entities other 

4 than such State or a revolving fund in such State, 

5 including municipalities, regional authorities, and 

6 private-public partnerships, if the infrastructure fa7 cilities meet the criteria for assistance established 

8 pursuant to subsection (b), and the State or States 

9 in which such facility or facilities are to be located 

10 have not met the conditions of subsection (d)(1). 

11 (3) MAJOR WORK DEFINED.—For purposes of 

12 paragraph (1), the term ‘‘major work’’ means the 

13 construction of a new infrastructure facility, or the 

14 reconstruction, rehabilitation, replacement, or expan15 sion of an existing infrastructure facility, involving 

16 the expenditure of more than $10,000,000. 

17 (e) INITIAL TARGETING OF READY-TO-GO

18 PROJECTS.—During the 3-year period beginning on the 

19 date of the enactment of this Act, the Corporation and 

20 the Insurance Corporation shall each seek to provide as21 sistance to projects involving the development of infra22 structure facilities which—

23 (1) the Corporation or the Insurance Corpora24 tion, as the case may be, determines are ready to 

25 move forward promptly; and 
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1 (2) meet all other requirements of this Act. 

2 (f) DEVELOPMENT RISK INSURANCE.—

3 (1) IN GENERAL.—Any project on the list es4 tablished pursuant to subsection (c)(2) shall be eligi5 ble to apply to the Corporation for development risk 

6 insurance in accordance with this subsection to in7 sure against the risk of loss that would result if a 

8 project does not proceed within a specified time 

9 frame as the result of the failure to secure relevant 

10 permits or specified Federal, State, or local approv11 als. 

12 (2) TERMS AND SCOPE OF COVERAGE.—Devel13 opment risk insurance provided under this sub14 section shall—

15 (A) contain such limitations, deductibles, 

16 exclusions, and exceptions as the Corporation 

17 shall establish; and 

18 (B) apply only to developmental costs in19 curred after the date of the approval of the ap20 plication for such insurance. 

21 (3) MAXIMUM ON INSURANCE OF

22 PRECONSTRUCTION RISK.—The Corporation shall 

23 not insure more than 50 percent of the 

24 preconstruction phase development risk of any 

25 project, as determined by the Corporation. 
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1 (4) ADDITIONAL CONDITIONS.—The Corpora2 tion may impose such other conditions and require3 ments in connection with any insurance provided 

4 under this subsection as the Corporation may deter5 mine to be appropriate, including requirements for 

6 audits of costs and other matters. 

7 (5) FEES FOR INSURANCE.—The Corporation 

8 may charge such fees and obtain such other com9 pensation for providing insurance coverage under 

10 this subsection as the Corporation, in the Corpora11 tion’s discretion, shall determine to be appropriate. 

12 (6) MAXIMUM EXPOSURE OF CORPORATION.—

13 The total outstanding exposure of the Corporation 

14 with respect to insurance provided under this sub15 section may not exceed the amount which is equal to 

16 5 percent of the sum of the capital, surplus, and re17 tained earnings of the Corporation, as measured at 

18 the time any such insurance is provided. 

19 (g) DISCRETION OF CORPORATION AND INSURANCE

20 CORPORATION.—Consistent with other provisions of this 

21 Act, any determination of the Corporation or the Insur22 ance Corporation to provide assistance to any project, and 

23 the manner in which such assistance is provided, including 

24 the terms, conditions, fees and charges in respect thereof, 
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1 shall be at the sole discretion of the Corporation or the 

2 Insurance Corporation, as the case may be. 

3 (h) INDEPENDENT INVESTMENT COMMITTEE.—Any 

4 final decision to provide or not provide assistance under 

5 this Act by the Corporation or the Insurance Corporation 

6 with respect to any specific proposal shall be made by an 

7 investment committee, of the respective corporation, which 

8 shall be comprised of senior officers of the Corporation 

9 and the Insurance Corporation, as the case may be, ap10 pointed to such committee by the respective board of direc11 tors, which committees shall not have any nonofficer direc12 tor members. 

13 (i) STATE AND LOCAL PERMITS REQUIRED.—The 

14 provision of assistance by the Corporation or the Insur15 ance Corporation in accordance with this section shall not 

16 be deemed to relieve any recipient of assistance or the re17 lated project of any obligation to obtain required State and 

18 local permits and approvals. 

19 (j) ANNUAL REPORT.—A State, revolving fund, or 

20 other entity receiving assistance from the Corporation or 

21 the Insurance Corporation shall make annual reports to 

22 the Corporation or the Insurance Corporation, as the case 

23 may be, on the use of any such assistance, compliance with 

24 the criteria set forth in this section, and a disclosure of 

25 all entities with a development, ownership, or operational 
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•HR 3715 IH 

1 interest in a project assisted or proposed to be assisted 

2 pursuant to this Act. 

3 (k) COOPERATION.—While the Corporation and In4 surance Corporation each has sole discretion, the Corpora5 tion and Insurance Corporation shall cooperate with State, 

6 local, and regional officials. 

7 SEC. 9. CAPITALIZATION AND ORGANIZATION OF THE COR8 PORATION AND THE INSURANCE CORPORA9 TION. 

10 (a) CAPITALIZATION.—

11 (1) CAPITALIZATION OF THE CORPORATION.—

12 (A) VOTING COMMON STOCK.—Effective 

13 for any fiscal year only to such extent and in 

14 such amounts as are provided in advance in ap15 propriation Acts, the Secretary shall subscribe 

16 for and purchase, in each of the 3 years fol17 lowing the date of enactment of this Act, voting 

18 common stock of the Corporation having an ag19 gregate purchase price in each year of 

20 $3,000,000,000, except that no such purchase 

21 shall occur after the transition date. 

22 (B) LIMITATION ON SALE OF SECURITIES

23 BY SECRETARY.—Securities purchased by the 

24 Secretary may not be sold or otherwise trans25 ferred by the Secretary unless such sale or 
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•HR 3715 IH 

1 transfer is effected pursuant to section 13 or is 

2 explicitly authorized by an Act of Congress. 

3 (2) CAPITALIZATION OF THE INSURANCE COR4 PORATION.—

5 (A) IN GENERAL.—The Corporation may 

6 subscribe for and purchase voting common 

7 stock of the Insurance Corporation in such 

8 amounts and at such times as the board of di9 rectors of the Corporation shall from time to 

10 time consider appropriate. 

11 (B) LIMITATION ON INVESTMENT BY COR12 PORATION.—Not more than 25 percent of the 

13 capital, surplus, and retained earnings of the 

14 Corporation may be invested by the Corporation 

15 in the Insurance Corporation without the con16 sent of the Secretary, measured at the time of 

17 any such investment. 

18 (3) REPURCHASE OF OUTSTANDING OBLIGA19 TIONS.—The Corporation and the Insurance Cor20 poration may purchase in the open market any of 

21 their respective outstanding obligations at any time 

22 and at any price. 

23 (b) PLACE OF BUSINESS AND GOVERNING LAW.—

24 (1) CORPORATION.—
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•HR 3715 IH 

1 (A) PRINCIPAL OFFICE.—The Corporation 

2 shall maintain its principal office in the District 

3 of Columbia, and shall be deemed, for purposes 

4 of venue in civil actions, to be a resident of the 

5 District of Columbia. 

6 (B) APPLICABILITY OF DISTRICT OF CO7 LUMBIA BUSINESS CORPORATION ACT.—To the 

8 extent not inconsistent with this Act, the Cor9 poration shall be subject to the District of Co10 lumbia Business Corporation Act. 

11 (2) INSURANCE CORPORATION.—

12 (A) PLACE OF BUSINESS.—The Insurance 

13 Corporation shall maintain its principal office 

14 in the District of Columbia, and shall be 

15 deemed, for purposes of venue in civil actions, 

16 to be a resident thereof. 

17 (B) APPLICABILITY OF DISTRICT OF CO18 LUMBIA BUSINESS CORPORATION ACT.—To the 

19 extent not inconsistent with this Act, the Insur20 ance Corporation shall be subject to the District 

21 of Columbia Business Corporation Act. 

22 (3) APPLICABILITY OF STATE INSURANCE

23 LAWS.—Before the transition date, the Corporation 

24 and the Insurance Corporation shall not be subject 

25 to the provisions of the law of any State or political 
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•HR 3715 IH 

1 subdivision of any State regulating the ownership or 

2 conduct of an insurance or surety business in any 

3 jurisdiction. 

4 (4) EXEMPTION FROM TAXATION.—

5 (A) ON AND BEFORE TRANSITION DATE.—

6 On and before the transition date, the Corpora7 tion, the Insurance Corporation, and any other 

8 subsidiary of the Corporation, including the 

9 franchise, capital, reserves, surplus, securities 

10 holdings, and income of the Corporation, the 

11 Insurance Corporation, or any such subsidiary 

12 shall be exempt from taxation now or hereafter 

13 imposed by the United States, any State, or 

14 any county, municipality, or local taxing au15 thority. 

16 (B) AFTER TRANSITION DATE.—After the 

17 transition date, the Corporation, the Insurance 

18 Corporation, and any other subsidiary of the 

19 Corporation, including the franchise, capital, re20 serves, surplus, securities holdings, and income 

21 of the Corporation, the Insurance Corporation, 

22 or any such subsidiary shall be exempt from all 

23 taxation now or hereafter imposed by the 

24 United States, any State, or any county, mu25 nicipality, or local taxing authority in any 
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•HR 3715 IH 

1 State, provided that the Corporation, the Insur2 ance Corporation and any other subsidiary of 

3 the Corporation shall be subject to Federal in4 come taxation. 

5 SEC. 10. MANAGEMENT OF THE CORPORATION. 

6 (a) BOARD OF DIRECTORS.—

7 (1) NUMBER AND APPOINTMENT.—Subject to 

8 the provisions of section 13, the Corporation shall 

9 have a board of directors consisting of 12 members, 

10 9 of whom shall be appointed by the President. 

11 (2) REQUIRED EXPERTISE.—The President 

12 shall appoint individuals to the board of directors of 

13 the Corporation with a demonstrated experience and 

14 expertise in the general field of infrastructure 

15 project development, finance, or related disciplines. 

16 (3) ADDITIONAL SELECTION CRITERIA.—The 

17 President shall ensure that, of the nonofficer direc18 tors appointed to the board of directors, a minimum 

19 of 6 shall be selected from among representatives of 

20 the private sector, of which—

21 (A) 2 shall be representatives of organized 

22 labor; and 

23 (B) 2 shall be individuals involved in the 

24 field of public-private infrastructure finance and 

25 related disciplines. 
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•HR 3715 IH 

1 (4) CONSULTATION WITH THE NATIONAL GOV2 ERNORS’ CONFERENCE.—The President shall select 

3 2 of the nonofficer directors to be appointed to the 

4 board of directors after consulting with and consid5 ering the recommendations of the National Gov6 ernors’ Conference. 

7 (5) APPOINTMENT OF OFFICERS TO THE

8 BOARD.—A majority of the nonofficer members of 

9 the board shall appoint the president of the Corpora10 tion who shall serve on the board of directors. The 

11 president of the Corporation shall select 2 executive 

12 officers to be appointed to the board, subject to con13 firmation by a majority of the board. 

14 (6) TERMS.—

15 (A) PRESIDENTIAL APPOINTEES.—Each 

16 director appointed by the President shall be ap17 pointed for a term of 4 years, except as pro18 vided in subparagraph (B). 

19 (B) INITIAL PRESIDENTIAL AP20 POINTEES.—As designated by the President, of 

21 the directors first appointed by the President—

(i) 1 22 ⁄3 shall be appointed for a term of 

23 2 years; 

(ii) 1 24 ⁄3 shall be appointed for a term 

25 of 3 years; and 
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•HR 3715 IH 

(iii) 1 1 ⁄3 shall be appointed for a term 

2 of 4 years. 

3 (C) OFFICER DIRECTORS.—Officer direc4 tors of the Corporation shall serve for a period 

5 of 1 year or until they cease to be an officer of 

6 the Corporation. 

7 (D) INTERIM APPOINTMENTS.—Any direc8 tor appointed to fill a vacancy occurring before 

9 the expiration of the term for which the direc10 tor’s predecessor was appointed shall be ap11 pointed only for the remainder of that term. 

12 (E) CONTINUATION OF SERVICE.—A direc13 tor may serve after the expiration of that direc14 tor’s term until a successor has taken office. 

15 (7) VACANCIES.—A vacancy in the board of di16 rectors shall be filled in the manner in which the 

17 original appointment was made. 

18 (8) REAPPOINTMENT.—

19 (A) PRESIDENTIAL APPOINTEES.—Mem20 bers of the board of directors appointed by the 

21 President may be reappointed by the President, 

22 consistent with the requirements of this section. 

23 (B) OFFICER DIRECTORS.—The president 

24 of the Corporation shall be reappointed to the 

25 board by the nonofficer directors for so long as 
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•HR 3715 IH 

1 such individual continues to serve as president 

2 of the Corporation. Officer directors of the 

3 board selected by the president of the Corpora4 tion may be reappointed by the president of the 

5 Corporation, consistent with the requirements 

6 of this section. 

7 (9) REMOVAL.—

8 (A) PRESIDENTIAL APPOINTEES.—A direc9 tor appointed by the President shall be subject 

10 to removal only for cause. 

11 (B) OFFICER DIRECTORS.—Officer direc12 tors of the Corporation shall be subject to re13 moval from the board in the discretion of a ma14 jority of the board, except that the president of 

15 the Corporation shall continue to serve on the 

16 board for so long as he or she serves as presi17 dent of the Corporation. 

18 (10) QUORUM.—7 directors shall constitute a 

19 quorum. 

20 (11) CHAIRPERSON.—The chairperson of the 

21 board of directors shall be selected by a majority of 

22 the board from among the nonofficer directors of the 

23 board, and shall serve for a period of 1 year, or until 

24 a new chairperson is selected. 
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•HR 3715 IH 

1 (12) STATUS AND COMPENSATION OF BOARD

2 MEMBERS.—

3 (A) NONOFFICER DIRECTORS.—Members 

4 of the board of directors who are not officers of 

5 the Corporation shall serve on a part-time basis 

6 and shall receive a per diem, when engaged in 

7 the actual performance of Corporation business, 

8 plus reasonable reimbursement for travel, sub9 sistence and other necessary expenses incurred 

10 in the performance of their duties. 

11 (B) OFFICER DIRECTORS.—Members of 

12 the board of directors who are officers of the 

13 Corporation shall not be entitled to receive any 

14 salary or other compensation for services as a 

15 director of the Corporation, but may receive 

16 reasonable reimbursement for travel, subsist17 ence and other necessary expenses incurred in 

18 the performance of their duties as directors of 

19 the Corporation. 

20 (13) CONFLICTS OF INTEREST.—

21 (A) IN GENERAL.—Nonofficer directors 

22 shall have no responsibility for, and shall not 

23 seek to influence, any decision of the inde24 pendent investment committee established pur25 suant to section 8(h). 
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•HR 3715 IH 

1 (B) CONSULTATION.—Notwithstanding 

2 subparagraph (A), the investment committee 

3 may, in the committee’s discretion and on the 

4 committee’s own initiative, consult with the 

5 board of directors as the committee sees fit. 

6 (C) LIMITATION ON CONSULTATION.—No 

7 nonofficer director of the Corporation who has, 

8 or is affiliated with a person who has, an inter9 est in any project under consideration for as10 sistance under this Act shall participate in any 

11 consultation under subparagraph (B) with re12 spect to such project. 

13 (14) MEETINGS.—The board of directors shall 

14 meet at any time pursuant to the call of the chair15 person or a majority of the directors and as provided 

16 by the bylaws of the Corporation, but not less than 

17 once each calendar quarter. 

18 (15) DUTIES.—In addition to any duties estab19 lished under this Act and the bylaws of the Corpora20 tion, the board of directors shall determine the gen21 eral policies which shall govern the operations of the 

22 Corporation in accordance with this Act. 

23 (16) DELEGATION OF AUTHORITY.—The board 

24 of directors may delegate duties and powers of the 
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•HR 3715 IH 

1 board to such committees of the board as the board 

2 may determine to be appropriate. 

3 (b) OFFICERS OF THE CORPORATION.—

4 (1) PRESIDENT OF THE CORPORATION.—The 

5 president of the Corporation shall be the chief execu6 tive officer of the Corporation, with such executive 

7 functions, powers, and duties as may be prescribed 

8 by this Act, the bylaws, or the board of directors. 

9 (2) APPOINTMENT OF OFFICERS.—The presi10 dent of the Corporation shall, with the approval of 

11 a majority of the board, appoint qualified individuals 

12 to such executive officer positions as may be pro13 vided for in the bylaws of the Corporation, and shall 

14 define their duties. The president may appoint, re15 move, fix the compensation of, and define the duties 

16 of other officers as provided in the bylaws. 

17 (3) COMPENSATION.—The compensation of the 

18 president and the executive officers of the Corpora19 tion shall be determined by the board of directors of 

20 the Corporation, in the discretion of the board of di21 rectors. 

22 (4) CONFLICTS OF INTEREST.—Officers of the 

23 Corporation shall not participate in any review or 

24 decision affecting a project under consideration for 

25 assistance under this Act if such officer has, or is 
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•HR 3715 IH 

1 affiliated with a person who has, an interest in such 

2 project. 

3 (5) REMOVAL.—Any executive officer of the 

4 Corporation may be removed in the discretion of a 

5 majority of the board of directors. 

6 SEC. 11. MANAGEMENT OF THE INSURANCE CORPORATION. 

7 (a) BOARD OF DIRECTORS.—

8 (1) NUMBER AND ELECTION.—Subject to the 

9 provisions of section 13, the Insurance Corporation 

10 shall have a board of directors consisting of 12 

11 members elected by the stockholders of the Insur12 ance Corporation. 

13 (2) INITIAL APPOINTMENT OF DIRECTORS.—

14 The initial directors of the Insurance Corporation 

15 shall be appointed by the board of directors of the 

16 Corporation. 

17 (3) REQUIRED EXPERTISE.—The board shall be 

18 comprised of individuals who have a demonstrated 

19 expertise and experience in the field of credit en20 hancement or insurance and related disciplines, a 

21 minimum of 9 of whom shall be selected from among 

22 representatives of the private sector. 

23 (4) TERMS.—
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•HR 3715 IH 

1 (A) IN GENERAL.—Each director shall be 

2 elected or appointed for a term of 2 years, ex3 cept as provided in subparagraph (B). 

4 (B) INTERIM APPOINTMENTS.—Any direc5 tor elected or appointed to fill a vacancy occur6 ring before the expiration of the term for which 

7 the director’s predecessor was appointed shall 

8 be elected or appointed only for the remainder 

9 of that term. 

10 (C) CONTINUATION OF SERVICE.—A direc11 tor may serve after the expiration of that direc12 tor’s term until a successor has taken office. 

13 (5) VACANCIES.—A vacancy in the board of di14 rectors shall be filled in the manner in which the 

15 original appointment was made, except that the by16 laws may provide for the appointment by the board 

17 of directors of a director to fill a vacancy occurring 

18 before the expiration of the term for which the direc19 tor’s predecessor was elected or appointed. 

20 (6) QUORUM.—7 directors shall constitute a 

21 quorum. 

22 (7) CHAIRPERSON.—

23 (A) ELECTION.—The chairperson of the 

24 board of directors shall be elected by the board 
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•HR 3715 IH 

1 of directors from among the directors on the 

2 board. 

3 (B) TERM.—The term of office of the 

4 chairperson shall be 1 year or until a new chair5 person is elected. 

6 (8) STATUS AND COMPENSATION OF BOARD

7 MEMBERS.—Members of the board of directors shall 

8 serve on a part-time basis and shall receive a per 

9 diem, when engaged in the actual performance of In10 surance Corporation business, plus reasonable reim11 bursement for travel, subsistence and other nec12 essary expenses incurred in the performance of their 

13 duties. 

14 (9) CONFLICTS OF INTEREST.—

15 (A) IN GENERAL.—Nonofficer directors 

16 shall have no responsibility for, and shall not 

17 seek to influence, any decision of the inde18 pendent investment committee established pur19 suant to section 8(h). 

20 (B) CONSULTATION.—Notwithstanding 

21 subparagraph (A), the investment committee 

22 may, in the committee’s discretion and on the 

23 committee’s own initiative, consult with the 

24 board of directors as the committee sees fit. 
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•HR 3715 IH 

1 (C) LIMITATION ON CONSULTATION.—No 

2 director who has, or is affiliated with any per3 son who has, an interest in any project under 

4 consideration for assistance under this Act shall 

5 participate in any such consultation with re6 spect to such project. 

7 (10) MEETINGS.—The board of directors shall 

8 meet at any time pursuant to the call of the chair9 person or a majority of the directors and as provided 

10 by the bylaws of the Insurance Corporation, but not 

11 less than once each calendar quarter. 

12 (11) DUTIES.—In addition to any duties estab13 lished under this Act or the bylaws of the Insurance 

14 Corporation, the board of directors shall determine 

15 the general policies which shall govern the oper16 ations of the Insurance Corporation in accordance 

17 with this Act. 

18 (12) DELEGATION OF AUTHORITY.—The board 

19 of directors may delegate duties and powers of the 

20 board to such committees of the board as the board 

21 may determine to be appropriate. 

22 (b) OFFICERS OF THE INSURANCE CORPORATION.—

23 (1) PRESIDENT OF THE INSURANCE CORPORA24 TION.—There shall be a position of president of the 

25 Insurance Corporation who shall be the chief execu-
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•HR 3715 IH 

1 tive officer of the Insurance Corporation, with such 

2 executive functions, powers, and duties as may be 

3 prescribed by the bylaws or by the board of direc4 tors. 

5 (2) APPOINTMENT OF OFFICERS.—The chair6 person of the board of directors of the Insurance 

7 Corporation shall, with the approval of a majority of 

8 the board, appoint a qualified individual to the posi9 tion of president of the Insurance Corporation. The 

10 president of the Insurance Corporation shall, with 

11 the approval of a majority of the board, appoint 

12 qualified individuals to such executive officer posi13 tions as may be provided for in the bylaws of the In14 surance Corporation, and shall define their duties. 

15 The president may appoint, remove, fix the com16 pensation of, and define the duties of other officers 

17 as provided in the bylaws. 

18 (3) COMPENSATION.—The compensation of the 

19 president and the executive officers of the Insurance 

20 Corporation shall be determined by the board of di21 rectors of the Insurance Corporation, in the discre22 tion of the board of directors. 

23 (4) CONFLICTS OF INTEREST.—Officers of the 

24 Insurance Corporation shall not participate in any 

25 review or decision affecting a project under consider-
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•HR 3715 IH 

1 ation for assistance under this Act if such officer 

2 has, or is affiliated with a person who has, an inter3 est in such project. 

4 (5) REMOVAL.—Any executive officer of the In5 surance Corporation may be removed in the discre6 tion of a majority of the board of directors. 

7 SEC. 12. BOARD OF DIRECTOR MEETINGS OPEN TO PUBLIC. 

8 (a) GENERAL.—All meetings of the full board of di9 rectors held to conduct the business of the Corporation 

10 or the Insurance Corporation shall be open to the public, 

11 and shall be preceded by reasonable notice. 

12 (b) CLOSED MEETINGS.—Pursuant to such rules as 

13 the Corporation and the Insurance Corporation may es14 tablish through their bylaws, the respective board of direc15 tors may close a meeting of the board if at the meeting 

16 there is likely to be disclosed information which could ad17 versely affect or lead to speculation relating to an infra18 structure project under consideration for assistance under 

19 this Act, or in financial or securities or commodities mar20 kets or institutions, utilities, or real estate. The deter21 mination to close any meeting of either board of directors 

22 shall be made in a meeting of such board, open to the 

23 public, and preceded by reasonable notice. The respective 

24 board of directors shall prepare minutes of any meeting 

25 which is closed to the public and make such minutes avail-
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•HR 3715 IH 

1 able as soon as the considerations necessitating closing 

2 such meeting no longer apply. 

3 SEC. 13. TRANSITION TO GOVERNMENT-SPONSORED EN4 TERPRISE. 

5 (a) GENERAL.—Within 5 years after the date of the 

6 enactment of this Act, the Corporation shall prepare a 

7 strategic plan for the transition of NIC to a government8 sponsored enterprise (as defined in section 3(8) of the 

9 Congressional Budget and Impoundment Control Act of 

10 1974 (2 U.S.C. 622(8)) and for the sale or transfer to 

11 investors other than the Federal Government, as set forth 

12 in subsection (b), of the voting securities of the Corpora13 tion. The Corporation shall revise such transition plan as 

14 needed. 

15 (b) PLAN; PENSION PLAN PARTICIPATION.—

16 (1) IN GENERAL.—The strategic plan shall in17 clude consideration of alternative means for effecting 

18 such transition through a broad distribution to long19 term investors, including by a public offering of 

20 stock or convertible stock or debt. 

21 (2) PENSION PLAN PARTICIPATION.—The stra22 tegic plan shall include provisions that specify that 

23 the initial purchasers of voting securities of the Cor24 poration or of nonvoting securities which are con25 vertible to such voting securities on the transition 
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•HR 3715 IH 

1 date (disregarding any underwriters of such securi2 ties) shall be pension plans. 

3 (c) MEANS OF TRANSFER.—

4 (1) IN GENERAL.—The strategic plan may call 

5 for a phased transfer of ownership or for complete 

6 transfer at a single point in time. 

7 (2) RULES APPLICABLE IN THE CASE OF A

8 PHASED TRANSITION.—If the plan calls for phased 

9 transfer of ownership—

10 (A) such transition shall be deemed to 

11 occur when 100 percent of the voting securities 

12 of the Corporation have been transferred to or 

13 are held by investors other than the Federal 

14 Government, and the investment of the Federal 

15 Government in the Corporation has been repaid 

16 or converted as provided in subsection (h); 

17 (B) before the transition date, all equity 

18 securities of the Corporation held by investors 

19 other than the Federal Government (or any eq20 uity security into which any other security is 

21 convertible) shall be nonvoting securities; and 

22 (C) on and after the transition date, non23 voting equity securities of the Corporation held 

24 by investors other than the Federal Government 

25 (or into which other securities are convertible) 
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•HR 3715 IH 

1 may, in accordance with the terms of such secu2 rities, be converted or become convertible into 

3 voting securities. 

4 (d) REQUIREMENT OF PRESIDENTIAL APPROVAL.—

5 The Corporation may not implement the transition plan 

6 without the approval of the President, and shall seek re7 approval if the plan is materially altered. 

8 (e) NOTIFICATION OF CONGRESS.—

9 (1) IN GENERAL.—The Corporation shall notify 

10 the Congress of—

11 (A) the Corporation’s intent to implement 

12 the transition plan; and 

13 (B) any material alteration of a transition 

14 plan previously submitted to the Congress. 

15 (2) REPORT.—Within 30 days of any notifica16 tion of the Congress under paragraph (1), the 

17 Comptroller General of the United States shall sub18 mit a report to Congress evaluating the extent to 

19 which—

20 (A) the transition plan (as then modified) 

21 would result in ongoing obligations (other than 

22 contemplated by subsection (h)) or undue cost 

23 to the Federal Government; and 

24 (B) the cash proceeds (or projected range 

25 thereof) to be provided to the Federal Govern-
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•HR 3715 IH 

1 ment, or the securities proposed to be received 

2 in exchange for the investment of the Federal 

3 Government in the Corporation or portion 

4 thereof, represents the full recoupment of such 

5 investment (after taking into account any divi6 dends paid to the Federal Government). 

7 (f) CONGRESSIONAL REVIEW.—The Corporation may 

8 implement the plan not less than 60 days after notification 

9 of the Congress, if the approval of the President referred 

10 to in subsection (d) has been received. 

11 (g) DEPOSIT OF PROCEEDS.—Any cash proceeds re12 ceivable by the Federal Government pursuant to this sec13 tion shall be deposited in the general fund of the Treasury. 

14 (h) CONVERSION OF FEDERAL GOVERNMENT IN15 VESTMENT.—Upon the implementation of the transition 

16 plan, the voting equity securities of the Corporation held 

17 by the Federal Government or, in the case of a phased 

18 transition, that portion of the voting equity securities 

19 which are subject to such phase shall be repurchased by 

20 the Corporation or converted to long-term subordinated 

21 debt securities having a par amount not less than the 

22 amounts appropriated pursuant to section 19 and subject 

23 to such phase, or a combination thereof, as contemplated 

24 by such plan. 

25 (i) BOARD OF DIRECTORS.—
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•HR 3715 IH 

1 (1) CORPORATION.—

2 (A) INITIAL BOARD.—Before the end of 

3 the 120-day period beginning on the transition 

4 date, a special meeting of the stockholders of 

5 the Corporation shall be held, at which all di6 rectors of the Corporation shall be elected to 

7 serve a 1-year term or until any such director’s 

8 successor has been elected. 

9 (B) NOMINATION; SELECTION CRITERIA.—

10 The candidates for election to the board of di11 rectors under paragraph (1) shall be nominated 

12 by the existing board of directors and 4 of such 

13 candidates shall be nominated in accordance 

14 with the selection criteria set out in section 

15 10(a)(3). 

16 (C) SUBSEQUENT BOARDS.—After the 1st 

17 election of a board of directors pursuant to sub18 paragraph (A), the directors shall be elected 

19 and subject to removal by the stockholders of 

20 the Corporation, as provided in the District of 

21 Columbia Business Corporation Act, except that 

22 the nomination of candidates for each election 

23 of the board of directors shall continue to re24 flect the requirements of section 10(a)(3). 

25 (2) INSURANCE CORPORATION.—
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•HR 3715 IH 

1 (A) INITIAL BOARD.—Promptly following 

2 the special meeting of the stockholders of the 

3 Corporation pursuant to paragraph (1), a spe4 cial meeting of the stockholders of the Insur5 ance Corporation shall be held, at which all di6 rectors or the Insurance Corporation shall be 

7 elected to serve a 1-year term or until any such 

8 director’s successor has been elected. 

9 (B) SUBSEQUENT BOARDS.—After the 1st 

10 election of a board of directors pursuant to sub11 paragraph (A), the directors shall be elected 

12 and subject to removal by the stockholders of 

13 the Insurance Corporation, as provided in the 

14 District of Columbia Business Corporation Act. 

15 (j) TRANSMITTAL OF FINAL PLAN AFTER COMPLE16 TION.—The Corporation shall transmit copies of the final 

17 strategic plan for transition to the President and the Con18 gress upon completion of such transition. 

19 SEC. 14. STATUS AND APPLICABILITY OF CERTAIN FED20 ERAL LAWS. 

21 (a) BEFORE THE TRANSITION DATE.—Before the 

22 transition date, the Corporation, the Insurance Corpora23 tion, and any other subsidiary of the Corporation, shall—

24 (1) not be agencies of the United States; and 
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•HR 3715 IH 

1 (2) comply with all Federal laws regulating the 

2 budgetary and auditing practices of a government 

3 corporation, except as otherwise provided in this Act. 

4 (b) SUBSEQUENT TO THE TRANSITION DATE.—On 

5 and after the transition date, the Corporation, the Insur6 ance Corporation, and any other subsidiary of the Cor7 poration shall not be considered to be an agency, instru8 mentality, or establishment of the United States Govern9 ment or a government corporation or a government-con10 trolled corporation, for purposes of any Federal law, ex11 cept as otherwise provided in this Act. 

12 (c) AUTHORIZED INVESTMENTS AND SECURITY.—All 

13 obligations issued by the Corporation shall be authorized 

14 investments for any person created under the laws of the 

15 United States or any State to the same extent that the 

16 person may hold or invest in obligations issued by or guar17 anteed as to principal or interest by the United States or 

18 any agency or instrumentality of the United States. 

19 (d) EFFECT OF AND EXEMPTIONS FROM OTHER

20 LAWS.—

21 (1) EXEMPT SECURITIES.—All equity and debt 

22 securities and other obligations issued by the Cor23 poration or the Insurance Corporation pursuant to 

24 this Act shall be deemed to be exempt securities 

25 within the meaning of laws administered by the Se-
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•HR 3715 IH 

1 curities and Exchange Commission to the same ex2 tent as securities which are direct obligations of, or 

3 obligations fully guaranteed as to principal or inter4 est by, the United States. 

5 (2) OPEN MARKET OPERATIONS AND STATE

6 TAX EXEMPT STATUS.—The obligations of the Cor7 poration shall be deemed to be obligations of the 

8 United States for the purposes of the provision des9 ignated as (b)(2) of the 2nd undesignated paragraph 

10 of section 14 of the Federal Reserve Act and section 

11 3124 of title 31, United States Code. 

12 (3) NO PRIORITY AS A FEDERAL CLAIM.—The 

13 priority established in favor of the United States by 

14 section 3713 of title 31, United States Code, shall 

15 not apply with respect to any indebtedness of the 

16 Corporation or the Insurance Corporation. 

17 (e) FEDERAL RESERVE BANKS AS DEPOSITARIES, 

18 CUSTODIANS, AND FISCAL AGENTS.—The Federal reserve 

19 banks may act as depositaries for, or custodians or fiscal 

20 agents of, the Corporation and the Insurance Corporation. 

21 (f) ACCESS TO BOOK-ENTRY SYSTEM.—The Sec22 retary may authorize the Corporation and the Insurance 

23 Corporation to use the book-entry system of the Federal 

24 reserve system. 
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1 SEC. 15. COMPLIANCE WITH DAVIS-BACON ACT. 

2 NIC shall take such action as may be necessary to 

3 ensure that projects assisted in whole or in part under 

4 the provisions of this Act shall incorporate a provision re5 quiring in any contract relating to any construction, recon6 struction, rehabilitation, replacement, or expansion of 

7 such project, that not less than the wages prevailing in 

8 the locality, as predetermined by the Secretary of Labor 

9 pursuant to the Act of March 3, 1931, commonly referred 

10 to as the ‘‘Davis-Bacon Act’’ (40 U.S.C. 276a), shall be 

11 paid to all laborers and mechanics employed to perform 

12 such contracts. 

13 SEC. 16. OBLIGATIONS NOT FEDERALLY GUARANTEED; 

14 STATE LAWS. 

15 (a) STATUS OF SECURITIES.—

16 (1) NO FULL FAITH AND CREDIT OF THE

17 U.S.—Obligations of the Corporation or the Insur18 ance Corporation, and obligations insured by any 

19 such corporation shall not be obligations of, or guar20 anteed as to principal or interest by, the United 

21 States or any agency of the United States and the 

22 obligations shall so plainly state. 

23 (2) FINANCING NOT TREATED AS U.S. GUAR24 ANTEE.—The provision of assistance of any kind or 

25 nature from NIC shall not be treated as a direct or 

26 indirect guarantee of any payment of principal or in-
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1 terest on any security by the United States for pur2 poses of section 149(b) of the Internal Revenue 

3 Code of 1986 or any other law. 

4 (b) STATE LAWS.—The receipt by any entity of any 

5 assistance under this Act, directly or indirectly, and any 

6 financial assistance provided by any governmental entity 

7 in connection with such assistance under this Act shall be 

8 valid and lawful notwithstanding any State or local restric9 tions regarding extensions of credit or other benefits to 

10 private persons or entities, or other similar restrictions. 

11 SEC. 17. AUDITS; REPORTS TO THE PRESIDENT AND THE 

12 CONGRESS. 

13 (a) ACCOUNTING.—The books of account of NIC 

14 shall be maintained in accordance with generally accepted 

15 accounting principles and shall be subject to an annual 

16 audit by independent public accountants of nationally rec17 ognized standing. 

18 (b) REPORTS.—NIC shall submit to the President 

19 and the Congress, within 90 days after the end of each 

20 fiscal year, a complete and detailed report with respect 

21 to the preceding fiscal year, setting forth—

22 (1) a summary of NIC’s operations, for such 

23 preceding fiscal year; 

24 (2) NIC’s financial statements and the opinion 

25 with respect thereto prepared by the independent 
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1 public accountant reviewing such statements and a 

2 copy of any report made on an audit conducted 

3 under subsection (a) of this section; 

4 (3) a schedule of NIC’s obligations and capital 

5 securities outstanding at the end of such fiscal year, 

6 with a statement of the amounts issued and re7 deemed or paid during such fiscal year; and 

8 (4) the status of projects receiving funding or 

9 other assistance pursuant to this Act, including dis10 closure of all entities with a development, ownership, 

11 or operational interest in such projects. 

12 (c) BOOKS AND RECORDS.—

13 (1) IN GENERAL.—NIC shall maintain adequate 

14 books and records to support the financial trans15 actions of the Corporation, the Insurance Corpora16 tion, and subsidiaries of such corporations. 

17 (2) AUDITS BY THE SECRETARY AND GAO.—

18 The books and records of NIC shall be maintained 

19 in accordance with recommended accounting prac20 tices and shall be open to inspection by the Sec21 retary and the Comptroller General of the United 

22 States. 
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1 SEC. 18. TAX TREATMENT OF DISTRIBUTIONS FROM QUALI2 FIED RETIREMENT PLANS INVESTING IN 

3 PUBLIC BENEFIT BONDS. 

4 (a) IN GENERAL.—Section 72 of the Internal Rev5 enue Code of 1986 (relating to annuities; certain proceeds 

6 of endowment and life insurance contracts) is amended by 

7 redesignating subsection (w) as subsection (x) and by in8 serting after subsection (v) the following new subsection: 

9 ‘‘(w) TREATMENT OF DISTRIBUTION FROM QUALI10 FIED RETIREMENT PLANS INVESTING IN PUBLIC BEN11 EFIT BONDS.—

12 ‘‘(1) IN GENERAL.—In the case of any qualified 

13 retirement plan which receives directly or indirectly 

14 any interest on any public benefit bond (including 

15 any payments in respect thereof made by a surety 

16 or guarantor) for purposes of applying this section 

17 to any distribution from such plan, the distributee’s 

18 investment in the contract shall be treated as includ19 ing such distributee’s allocable share of such interest 

20 under the terms of the qualified retirement plan, 

21 and any such distribution shall be treated as a dis22 tribution described in subsection (e)(2)(B) in which 

23 the distribution is allocable first to the investment in 

24 the contract attributable to such interest. 

25 ‘‘(2) TREATMENT OF INSTALLMENTS.—In the 

26 case of a distribution to be made over more than one 
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1 calendar year, the amount of public benefit bond in2 terest to be taken into account with respect to a 

3 given calendar year shall be the aggregate amount of 

4 such interest allocable to the distributee as of the 

5 end of the prior calendar year. With respect to the 

6 final calendar year, the amount of public benefit 

7 bond interest to be taken into account shall include 

8 the amount of such interest received by the plan 

9 during such year that is allocable to the plan partici10 pant with respect to whom the distribution is made. 

11 ‘‘(3) PUBLIC BENEFIT BOND.—For purposes of 

12 this subsection, the term ‘public benefit bond’ means 

13 any obligation issued after the date of the enactment 

14 of this subsection if—

15 ‘‘(A) 95 percent or more of the net pro16 ceeds of such obligation are used in connection 

17 with the financing or refinancing of 1 or more 

18 infrastructure facilities, 

19 ‘‘(B) such obligation has received a pub20 lished rating, and 

21 ‘‘(C) the development of such infrastruc22 ture facilities have been or will be undertaken 

23 by a governmental entity or public-private part24 nership, 
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1 as such terms are defined in section 4 of the Na2 tional Infrastructure Development Act of 2004. 

3 ‘‘(4) CERTIFICATION OF INFRASTRUCTURE FA4 CILITIES.—An issuer of an obligation of which 95 

5 percent or more of the net proceeds are to be used 

6 in connection with the financing or refinancing of 1 

7 or more facilities may apply to the National Infra8 structure Development Corporation, in accordance 

9 with such procedures as such corporation may estab10 lish, for certification that any such facility is an in11 frastructure facility (as defined in section 4 of the 

12 National Infrastructure Development Act of 2004). 

13 Certification by the Corporation shall create a pre14 sumption of such status, but shall not be binding on 

15 the Secretary. 

16 ‘‘(5) LEGEND REQUIRED.—No obligation shall 

17 be a public benefit bond for purposes of this sub18 section unless it is designated as intended to be a 

19 public benefit bond on the date of issuance and 

20 bears a legend to such effect. 

21 ‘‘(6) QUALIFIED RETIREMENT PLAN.—For pur22 poses of this subsection, the term ‘qualified retire23 ment plan’ means—

24 ‘‘(A) a qualified retirement plan (as de25 fined in section 4974(c)), and 
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1 ‘‘(B) an eligible deferred compensation 

2 plan (as defined in section 457(b)). 

3 ‘‘(7) TREATMENT OF DIVIDENDS FROM MUTUAL

4 FUNDS.—

5 ‘‘(A) IN GENERAL.—For purposes of this 

6 subsection, in the case of any dividend (other 

7 than a dividend described in section 854(a)) re8 ceived from a regulated investment company 

9 which meets the requirements of section 852 for 

10 the taxable year in which it paid the dividend—

11 ‘‘(i) the entire amount of such divi12 dend shall be treated as interest on a pub13 lic benefit bond if the aggregate interest on 

14 such bonds received by such company dur15 ing the taxable year equals or exceeds 75 

16 percent of its gross income, or 

17 ‘‘(ii) if clause (i) does not apply, a 

18 portion of such dividend shall be treated as 

19 interest on a public benefit bond based on 

20 the portion of the company’s gross income 

21 which consists of such interest. 

22 ‘‘(B) NOTICE TO SHAREHOLDERS.—The 

23 amount of any distribution by a regulated in24 vestment company which may be taken into ac25 count as interest on a public benefit bond for 
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1 purposes of this section shall not exceed the 

2 amount so designated by the company in a writ3 ten notice to its shareholders mailed not later 

4 than 45 days after the close of its taxable year. 

5 ‘‘(C) GROSS INCOME.—For purposes of 

6 this section, the term ‘gross income’ does not 

7 include gain from the sale or other disposition 

8 of stock or securities.’’. 

9 (b) EFFECTIVE DATE.—The amendment made this 

10 section shall apply to distributions after the date of the 

11 enactment of this Act. 

12 SEC. 19. AUTHORIZATIONS. 

13 (a) APPROPRIATIONS AUTHORIZED FOR ESTABLISH14 MENT.—There are hereby authorized to be appropriated 

15 to the Secretary $30,000,000 for the purpose of facili16 tating the NIC’s initial operations. 

17 (b) APPROPRIATIONS AUTHORIZED FOR CONDUCT OF

18 BUSINESS OF NIC.—There are authorized to be appro19 priated to the Secretary $3,000,000,000 for each of the 

20 fiscal years 2005 through 2008 to make the capital con21 tributions in accordance with section 9(a)(1)(A) for the 

22 purpose of carrying out this Act. 

23 (c) ESTABLISHMENT OF NIC ACCOUNT.—Before the 

24 transition date, the funds appropriated under subsection 

25 (b) shall be deposited in an account to be established in 
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1 the Treasury of the United States to be known as the 

2 ‘‘National Infrastructure Development Corporation Ac3 count’’, which shall be available to the Corporation, with4 out need for further appropriation and without fiscal year 

5 limitation, for carrying out its purposes, functions and 

6 powers, including the investment and reinvestment of 

7 these funds as permitted in this Act, and which shall not 

8 be subject to apportionment under subchapter II of chap9 ter 15 of title 31, United States Code. The Secretary of 

10 the Treasury, in consultation with the board of directors 

11 of the Corporation, shall invest amounts in the account 

12 in public debt securities with maturities suitable to the 

13 needs of the account and bearing interest at rates deter14 mined by the Secretary, taking into consideration current 

15 market yields on outstanding marketable obligations of the 

16 United States of comparable maturities. 

17 SEC. 20. PROHIBITION ON ADDITIONAL FEDERAL ASSIST18 ANCE. 

19 Except as otherwise specifically provided by sections 

20 13 and 19, NIC shall receive no appropriations, loans, or 

21 other financial assistance from the Federal Government.

Æ