I

103D CONGRESS

1ST SESSION H. R. 450

To amend the Public Works and Economic Development Act of 1965 to

establish a National Public Works Corporation for purposes of providing

financial assistance to States and local governments for the construction,

rehabilitation, and repair of certain public facilities, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 6, 1993

Mr. CLINGER introduced the following bill; which was referred to the

Committee on Public Works and Transportation

A BILL

To amend the Public Works and Economic Development

Act of 1965 to establish a National Public Works Corporation for purposes of providing financial assistance

to States and local governments for the construction,

rehabilitation, and repair of certain public facilities, 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 That this Act may be cited as the ‘‘National Public Works

4 Corporation Act’’.
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1 SEC. 2. Title II of the Public Works and Economic

2 Development Act of 1965 (42 U.S.C. 3141–3144) is

3 amended to read as follows:

4 ‘‘TITLE II—PUBLIC WORKS CORPORATION

5 ‘‘ESTABLISHMENT OF THE PUBLIC WORKS CORPORATION

6 ‘‘SEC. 201. There is established a body corporate to

7 be known as the National Public Works Corporation (re8 ferred to in this title as the ‘Corporation’) which shall be

9 an instrumentality of the United States and shall have

10 succession until dissolved by Act of Congress.

11 ‘‘BOARD OF DIRECTORS

12 ‘‘SEC. 202. (a) The management of the Corporation

13 shall be vested in a Board of Directors consisting of seven

14 directors who shall be appointed by the President by and

15 with the advice and consent of the Senate. One director

16 shall be appointed as Chairman and one director shall be

17 appointed as Vice Chairman in accordance with subsection

18 (b). Except as provided in subsection (b) of this section,

19 the term of each director shall be eight years. Any director

20 appointed to fill a vacancy shall be appointed only for the

21 unexpired portion of the term. Any director may continue

22 to serve as such after the expiration of the term for which

23 he was appointed until his successor has been appointed

24 and has qualified.
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1 ‘‘(b) Of the members first appointed to the Board of

2 Directors, one shall be appointed for a term of two years,

3 one shall be appointed for a term of three years, one (who

4 shall be appointed Vice Chairman) shall be appointed for

5 a term of four years, one shall be appointed for a term

6 of five years, one shall be appointed for a term of six

7 years, one shall be appointed for a term of seven years,

8 and one (who shall be appointed Chairman) shall be ap9 pointed for a term of eight years. Any person appointed

10 as a director thereafter to fill the seat held by the Vice

11 Chairman shall be appointed as Vice Chairman and any

12 person appointed as a director thereafter to fill the seat

13 held by the Chairman shall be appointed as Chairman.

14 ‘‘OFFICERS AND EMPLOYEES

15 ‘‘SEC. 203. (a) The Board of Directors of the Cor16 poration shall appoint a President of the Corporation and

17 such other officers and employees as it deems necessary

18 to carry out the functions of the Corporation, subject to

19 the provisions of title 5, United States Code, governing

20 appointments in the competitive service, and persons so

21 appointed shall be paid in accordance with the provisions

22 of chapter 51 and subchapter III of chapter 53 of such

23 title relating to classification and General Schedule pay

24 rates. The President of the Corporation shall be an ex

25 officio member of the Board of Directors and may partici-
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1 pate in meetings of the Board except that he shall have

2 no vote except in case of an equal division. No individual

3 other than a citizen of the United States may be an officer

4 of the Corporation. No officer of the Corporation shall re5 ceive any salary or other remuneration from any source

6 other than the Corporation during the period of his em7 ployment by the Corporation.

8 ‘‘(b) No director, officer, attorney, agent, or employee

9 of the Corporation shall in any manner, directly or indi10 rectly, participate in the deliberations upon or the deter11 mination of any question affecting his personal interests,

12 or the interests of any corporation, partnership, or asso13 ciation in which he is directly or indirectly interested.

14 ‘‘(c) The Chairman and Vice Chairman shall be com15 pensated at the rate payable under level III of the Execu16 tive Schedule under section 5314 of title 5, United States

17 Code. The other directors shall be compensated at the rate

18 payable under level IV of the Executive Schedule under

19 section 5315 of title 5, United States Code.

20 ‘‘(d) Not more than four directors serving at any time

21 may be from one political party.

22 ‘‘(e) The Corporation shall not engage in political ac23 tivities nor provide financing for or assist in any manner

24 any project or facility involving political parties, nor shall

25 the directors, officers, employees, or agents of the Cor-
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1 poration in any way use their connection with the Corpora2 tion for the purpose of influencing the outcome of any

3 election.

4 ‘‘CORPORATE POWERS

5 ‘‘SEC. 204. (a) The Corporation shall have power—

6 ‘‘(1) to adopt, alter, and use a corporate seal;

7 ‘‘(2) to make contracts;

8 ‘‘(3) to lease such real estate as may be nec9 essary for the transaction of its business;

10 ‘‘(4) to sue and be sued, to complain and de11 fend, in any court of competent jurisdiction, State or

12 Federal;

13 ‘‘(5) to select, employ, and fix the compensation

14 of such officers, employees, attorneys, and agents as

15 shall be necessary for the transaction of the business

16 of the Corporation;

17 ‘‘(6) to define the authority and duties of such

18 officers, employees, attorneys, and agents, require

19 bonds of them and fix the penalties thereof, and to

20 dismiss at pleasure such officers, employees, attor21 neys, and agents;

22 ‘‘(7) to prescribe, amend, and repeal, by its

23 Board of Directors, bylaws, rules, and regulations

24 governing the manner in which its general business

25 may be conducted and the powers granted to it by
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1 law may be exercised and enjoyed together with pro2 vision for such committees and the functions thereof

3 as the Board of Directors may deem necessary for

4 facilitating its business under this title; and

5 ‘‘(8) to exercise, to the extent not inconsistent

6 with the provisions of this title, the general cor7 porate powers of a corporation organized and exist8 ing under the laws of the District of Columbia.

9 ‘‘(b) The Board of Directors of the Corporation shall

10 determine and prescribe the manner in which its obliga11 tions shall be incurred and its expenses allowed and paid.

12 ‘‘(c) The Corporation shall be entitled to the free use

13 of the United States mails in the same manner as the ex14 ecutive departments of the Government.

15 ‘‘(d) The Corporation, with the consent of any board,

16 commission, independent establishment, or executive de17 partment of the Government, including any field service

18 thereof, may avail itself of the use of information, services,

19 facilities, officers, and employees thereof in carrying out

20 the provisions of this title.

21 ‘‘PRINCIPAL OFFICE

22 ‘‘SEC. 205. The principal office of the Corporation

23 shall be located in the District of Columbia.
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1 ‘‘BORROWING AUTHORITY

2 ‘‘SEC. 206. (a) The Corporation may issue notes, de3 bentures, bonds, and other evidences of indebtedness in

4 such amounts and on such terms and conditions as its

5 Board of Directors may determine subject to the limita6 tions prescribed in this title.

7 ‘‘(b) Except as provided in section 209(b) of this title,

8 the aggregate outstanding indebtedness of the Corporation

9 under this section at any time may not exceed ten times

10 the reserve fund of the Corporation under section 207(a)

11 of this title at that time.

12 ‘‘(c) The obligations of the Corporation issued under

13 this section shall be guaranteed with the full faith and

14 credit of the United States.

15 ‘‘(d) Any of the obligations issued by the Corporation

16 may be secured by its pledging or granting of security in17 terests in all or any part of its revenues or other receipts

18 or all or any part of its assets.

19 ‘‘(e) Neither the Directors nor any other person exe20 cuting obligations shall be subject to any personal liability

21 or accountability by reason of the issuance thereof.

22 ‘‘(f) All obligations of the Corporation shall be nego23 tiable instruments, subject only to any provisions for reg24 istration of ownership of obligations.
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1 ‘‘CAPITALIZATION AND RESERVE FUND

2 ‘‘SEC. 207. (a) The capitalization of the Corporation

3 shall consist of amounts appropriated pursuant to sub4 section (b) of this section and amounts contributed by par5 ticipating States in accordance with subsection (c) of this

6 section. The amount of the capitalization shall constitute

7 a reserve fund which shall not be available for making

8 loans under this title. The Corporation may invest any

9 portion of the reserve fund which is not, in its judgment,

10 required to meet current needs. Such investments may be

11 made only in interest-bearing obligations of the United

12 States with maturities suitable for the needs of the Cor13 poration. The interest on and the proceeds from the sale

14 or redemption of any such obligation shall be credited to

15 and form a part of the reserve fund.

16 ‘‘(b) There is authorized to be appropriated for the

17 capitalization of the Corporation for fiscal years beginning

18 after September 30, 1993, not to exceed $2,500,000,000.

19 ‘‘(c) A State electing to participate in the Corporation

20 may make contributions to the Corporation at such times

21 and in such amounts as the State chooses. Except as pro22 vided in section 209(d) of this title, the total contributions

23 of a State to the Corporation shall not exceed an amount

24 equal to the amount which bears the same ratio to
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1 $2,500,000,000 as the population of such State bears to

2 the population of all the States.

3 ‘‘LOANS TO STATES AND LOCAL GOVERNMENTS

4 ‘‘SEC. 208. (a) The Corporation is authorized to

5 make loans to participating States and to units of local

6 government located in participating States for projects for

7 the construction, rehabilitation, and repair of public facili8 ties in accordance with this section. Any such loan may

9 be in an amount sufficient to pay for all or a portion of

10 the cost of completing an approved project, except that

11 the amount of any such loan may not be used for payment

12 of the non-Federal share of the cost of any project for

13 which a Federal grant is made.

14 ‘‘(b)(1) Except as otherwise provided in section

15 209(c) of this title, the total amount of the loans outstand16 ing under subsection (a) of this section shall at no time

17 exceed the aggregate outstanding indebtedness of the Cor18 poration under section 206(b) of this title.

19 ‘‘(2)(A) Except as otherwise provided in subpara20 graph (B) of this paragraph and section 209(c) of this

21 title, the total amount of the loans to a State and to units

22 of local government within such State outstanding under

23 subsection (a) of this section shall at no time exceed that

24 amount which bears the same ratio to the total amount

25 allowable under paragraph (1) of this subsection as the
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1 amount of contributions made by such State to the Cor2 poration under section 207(c) of this title bears to the

3 amount of contributions made by all participating States

4 to the Corporation under section 207(c) of this title.

5 ‘‘(B) In no event shall the total amount allowable

6 under subparagraph (A) for loans to a State and to units

7 of local government in such State exceed the amount

8 which would be allowable for loans to such State and such

9 units under subparagraph (A) if (i) the full amount au10 thorized by section 207(b) were appropriated, (ii) each

11 State made the maximum contribution allowable to such

12 State under section 207(c), and (iii) the Corporation in13 curred the maximum allowable indebtedness under section

14 206(b).

15 ‘‘(c) The Corporation may not make a loan for a

16 project for a public facility unless the Corporation deter17 mines that the public facility after completion of the

18 project will generate fees for the use of the facility in

19 amounts sufficient to repay the principal and interest on

20 the loan and to create a sufficient reserve for operation

21 and maintenance of the project and for replacement costs

22 over the useful life of the project. An applicant for a loan

23 under this section shall demonstrate to the satisfaction of

24 the Corporation that such applicant (or the agency or in25 strumentality for whom such applicant is applying under
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1 subsection (h)(1) or (h)(2)) has the legal authority to as2 sess and collect such fees with respect to the project and

3 that such fees will provide sufficient revenues to meet the

4 requirements of the preceding sentence.

5 ‘‘(d) As a condition of any loan made under this title

6 for a project for a public facility, the Corporation shall

7 require that fees for the use of the facility be collected

8 over the term of the loan in amounts sufficient to meet

9 the requirements of subsection (c) and that all such fees

10 be deposited in separate accounts (1) for the payment of

11 principal and interest on such loan, and (2) for the pay12 ment of operation, maintenance, and replacement costs.

13 ‘‘(e) The Corporation may disapprove a loan applica14 tion under this section for a project if it determines that

15 the project is not feasible from an engineering standpoint,

16 that the project will not generate revenues sufficient to

17 satisfy the requirements of subsection (c) of this section,

18 or that it is otherwise inconsistent with this title.

19 ‘‘(f) Each loan made under this title shall bear inter20 est at a rate determined by the Corporation to be nec21 essary to provide a return to the Corporation sufficient

22 to pay for the Corporation’s cost of borrowing funds and

23 for the Corporation’s administrative costs (including the

24 costs of salaries of directors, officers, and employees).
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1 ‘‘(g) The term of repayment for any loan made under

2 this section shall not exceed the useful life of the project

3 (as determined by the Corporation), except that in no

4 event shall such term exceed 25 years.

5 ‘‘(h)(1) The Governor of a State shall submit applica6 tions for loans for projects involving public facilities of

7 such State or any agency or instrumentality of such State.

8 In the case of any agency or instrumentality of two or

9 more States, the Governors of such States shall jointly

10 submit applications for loans for projects involving public

11 facilities of such agency or instrumentality.

12 ‘‘(2) The responsible official of a unit of local govern13 ment shall submit applications for loans for projects in14 volving public facilities of such unit of local government

15 or any agency or instrumentality of such unit. In the case

16 of an agency or instrumentality of two or more units of

17 local government, the responsible officials of such units

18 shall jointly submit applications for loans for projects in19 volving public facilities of such agency or instrumentality.

20 ‘‘(3) The Corporation shall not approve an applica21 tion for a loan submitted by one or more units of local

22 government within a State unless the Governor of such

23 State has certified approval of the application.

24 ‘‘(4) The Governor of a State shall not submit appli25 cations for loans for such State and approve applications
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1 for loans for units of local government in such State in

2 aggregate amounts which exceed the amount allowable for

3 loans in such State under subsection (b)(2). Any applica4 tion for a loan for a project for an agency or instrumental5 ity of two or more States shall contain an agreement

6 among such States as to the apportionment of costs

7 among such States for purposes of this paragraph and

8 subsection (b)(2).

9 ‘‘(5) The Governor of a State shall ensure a proper

10 distribution of the funds allowable for loans in such State

11 under subsection (b)(2) between urban and rural areas by

12 selecting projects for submission under paragraph (1) and

13 projects for approval under paragraph (2) so that the per14 centage of funds borrowed for projects in units of local

15 government having a population of 50,000 or more is not

16 more than 5 percent greater nor less than 5 percent lower

17 than the percentage of the State’s population residing in

18 units of local government having a population of 50,000

19 or more. After the end of the two-year period beginning

20 on the date the first loan is made under this title to a

21 State or a unit of local government in such State, the Cor22 poration shall only make a loan to such State or such a

23 unit if, after taking into account that loan and all previous

24 loans made to such State and such units, the Governor

25 will be in compliance with the preceding sentence or will
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1 be more closely in compliance with the preceding sentence

2 than before such loan was made.

3 ‘‘(i) As a condition of any loan under this title, the

4 Corporation shall require that all contracts made with the

5 proceeds of such loan be awarded on the basis of competi6 tive bidding.

7 ‘‘(j) The Corporation shall conduct such audits as

8 may be necessary to enforce this title. If the Corporation

9 determines that fees are not being collected in sufficient

10 amounts to meet the requirements of subsection (c) of this

11 section, the Corporation shall notify the loan recipient of

12 the amount by which such fees need to be increased. The

13 Corporation shall not make additional loans to such recipi14 ent until the fees are so increased.

15 ‘‘(k) There is authorized to be appropriated to the

16 Corporation for fiscal years beginning after September 30,

17 1993, such additional sums as may be necessary to reduce

18 interest rates paid by borrowers under this title. Any

19 amount appropriated under this subsection for a fiscal

20 year shall be applied uniformly, as determined by the Cor21 poration, to reduce interest rates for all recipients of loans

22 under this title during such fiscal year.

23 ‘‘DEFAULTS

24 ‘‘SEC. 209. (a)(1) If the Corporation determines that

25 any loan is in default, the Corporation shall notify the re-
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1 cipient (and the State in which a unit of local government

2 is located if such unit is the recipient) of such default.

3 ‘‘(2) During the period beginning on the date of such

4 notification and ending on the earlier of the date such de5 fault is cured or the date which is two years after the date

6 of such notification, the Corporation shall not make loans

7 to such recipient and, in any case in which the recipient

8 is a State, the Corporation shall not make loans to any

9 unit of local government within that State.

10 ‘‘(3) If the recipient (or the State on behalf of a recip11 ient which is a unit of local government) does not cure

12 any default within two years after the date of notification

13 under paragraph (1), the Corporation shall reduce the re14 serve fund established under section 207(a) by the amount

15 of the loan which remains in default. Such amount shall

16 be set aside for purposes of repaying the holders of the

17 obligations issued under section 206 of this title.

18 ‘‘(b) A reduction in the reserve fund under subsection

19 (a)(3) of this section shall not affect any outstanding obli20 gation for purposes of applying the limitation on indebted21 ness under section 206(b) of this title. The Corporation

22 shall not issue any obligation under section 206 of this

23 title after such a reduction if the outstanding indebtedness

24 of the Corporation after the issuance of such obligation
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1 exceeds an amount equal to ten times the reserve fund,

2 as so reduced.

3 ‘‘(c) A reduction in the reserve fund under subsection

4 (a)(3) of this section shall not affect any outstanding loan

5 for purposes of applying the limitations on amounts allow6 able for loans under paragraphs (1) and (2) of section

7 208(b) of this title. Any reduction in the amount available

8 for loans which results from such a reduction in the re9 serve fund shall first be applied to reduce the amount

10 available for future loans to the State which is found to

11 be in default and to units of local government within such

12 State. To the extent necessary, after the amount available

13 to such State and such units is reduced to zero, such a

14 reduction in the reserve fund shall be applied to reduce

15 the amount available for future loans to the other States

16 and units of local government within such States in pro17 portion to the contributions of each such State to the

18 Corporation.

19 ‘‘(d) At any time after a reduction is made in the

20 reserve fund under subsection (a)(3) of this section on ac21 count of a default by a State or a unit of local government

22 in such State, such State may contribute all or a portion

23 of the amount of such reduction to the reserve fund. Any

24 additional amount of authority to make loans under sec25 tion 208(b)(1) resulting from such contribution shall first
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1 be made available to States other than the State making

2 such contribution and to units of local government in such

3 States to the extent that the amount available to such

4 other States and units was reduced under subsection (c)

5 of this section, and any excess authority to make loans

6 resulting from such contribution shall be made available

7 to the State making such contribution and to units of local

8 government in such State.

9 ‘‘TAXABLE STATUS

10 ‘‘SEC. 210. The Corporation, its property, its fran11 chise, capital, reserves, surplus, security holdings, and

12 other funds, and its income shall be exempt from all tax13 ation now or hereafter imposed by the United States or

14 by any State or local taxing authority; except that (1) any

15 real property and any tangible personal property of the

16 Corporation shall be subject to Federal, State, and local

17 taxation to the same extent according to its value as other

18 such property is taxed, and (2) any and all obligations

19 issued by the Corporation shall be subject both as to prin20 cipal and interest to Federal, State, and local taxation to

21 the same extent as the obligations of private corporations

22 are taxed.

23 ‘‘AUDIT BY GENERAL ACCOUNTING OFFICE

24 ‘‘SEC. 211. The General Accounting Office shall audit

25 the financial transactions of the Corporation, and for this
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1 purpose shall have access to all its books, records, and

2 accounts.

3 ‘‘ANNUAL REPORT

4 ‘‘SEC. 212. The Corporation shall submit an annual

5 report to the Congress and the President as soon as prac6 ticable after the end of each fiscal year on the status of

7 the Corporation and its reserve fund. Each such report

8 shall include a description of the projects for which loans

9 were made during the preceding fiscal year.

10 ‘‘DEFINITIONS

11 ‘‘SEC. 213. For purposes of this title—

12 ‘‘(1) the term ‘construction’ means the actual

13 building of a new public facility at a site where no

14 similar facility previously existed, including the ac15 quisition of land for such facility and nonstructural

16 alternatives, and the reconstruction of a public facil17 ity at an existing site or adjacent to an existing site;

18 ‘‘(2) the term ‘maintenance’ means routine and

19 regularly scheduled activities intended to keep a

20 public facility operating at its designed specifica21 tions;

22 ‘‘(3) the term ‘public facility’ means any facility

23 owned or operated by a State, a unit of local govern24 ment, or an agency or instrumentality of one or

25 more States or units of local government, including,
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1 but not limited to, a highway, street, bridge, mass

2 transit facility and equipment, airport, water supply

3 and distribution system, sewer, lock and dam, build4 ing, port, waterway, and dock; except that such term

5 does not include any Federal-aid highways (as de6 fined in title 23, United States Code);

7 ‘‘(4) the term ‘rehabilitation’ means the correc8 tion of structural flaws in a public facility so as to

9 extend the design life of such facility;

10 ‘‘(5) the term ‘repair’ means the correction of

11 a structural flaw in a public facility without adding

12 significantly to the design life of such facility;

13 ‘‘(6) the term ‘State’ means the several States,

14 the District of Columbia, Puerto Rico, the Virgin Is15 lands, Guam, American Samoa, and the Common16 wealth of the Northern Marianas; and

17 ‘‘(7) the term ‘unit of local government’ means

18 a city, county, town, township, parish, village, or

19 other general purpose political subdivision of a

20 State, and an Indian tribe.’’.

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