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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 2116 Introduced in Senate (IS)]

104th CONGRESS
  2d Session
                                S. 2116

  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 SENATE OF THE UNITED STATES

                           September 24, 1996

 Mr. Moynihan introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Infrastructure Development 
Act of 1996''.

SEC. 2. FINDINGS.

    The Congress hereby finds the following:
            (1) As expressed in Executive Order No. 12893 of January 
        26, 1994, which sets out guiding principles for Federal 
        infrastructure investments, a well functioning infrastructure 
        is vital to sustained economic growth, to the quality of life 
        of our communities, and to the protection of our environment 
        and natural resources.
            (2) Although grant programs of the Federal Government must 
        continue to play a central role in financing the infrastructure 
        needs of the Nation, current and foreseeable demands on 
        existing Federal, State, and local funding for infrastructure 
        expansion and replacement exceed the resources to support these 
        programs by margins wide enough to prompt serious concerns 
        about the Nation's ability to sustain long-term economic 
        development, productivity, and international competitiveness.
            (3) Increased investments by public and private capital in 
        infrastructure facilities the financing for which can be based 
        on the revenue generated by such facilities and by other 
        dedicated revenue sources would assist the Nation in 
        marshalling the resources necessary to meet existing and 
        projected infrastructure funding demands.
            (4) The private capital markets, including the more than 
        $4,500,000,000,000 dollars in capital held by institutional 
        investors such as pension funds, have a growing interest in 
        public-private infrastructure investment opportunities that can 
        produce competitive risk-adjusted rates of return.
            (5) Federal leadership is necessary to expeditiously 
        develop these new infrastructure investment mechanisms.
            (6) Such leadership can best be accomplished by the 
        establishment of a self-supporting national entity designed to 
        lead the way in promoting appropriate public-private 
        infrastructure partnerships and by the creation of a public 
        benefit bond designed to facilitate investment by pension plans 
        in infrastructure development.
            (7) Such a national entity will provide for significant and 
        sustained job growth in critical sectors of the Nation's 
        economy as it helps address unmet infrastructure needs by 
        leveraging limited Federal resources with private capital.

SEC. 3. PURPOSES.

    The purposes of this Act are as follows:
            (1) To establish the National Infrastructure Development 
        Corporation for the purpose of making new sources of financing 
        available for the development of infrastructure facilities, and 
        to facilitate the use and issuance of public benefit bonds.
            (2) To establish a subsidiary of the Corporation, the 
        National Infrastructure Insurance Corporation, to issue 
        insurance, reinsurance and related undertakings in respect of 
        the issuance of obligations related to the development of 
        infrastructure facilities.
            (3) To establish a category of financial instrument to be 
        known as ``public benefit bonds'' designed to help facilitate 
        pension plan investment in the development of infrastructure 
        facilities.

SEC. 4. DEFINITIONS.

    The following definitions shall apply for purposes of this Act 
unless the context requires otherwise:
            (1) Corporation.--The term ``Corporation'' means the 
        National Infrastructure Development Corporation established 
        under section 5(a).
            (2) Development.--The terms ``development'' and ``develop'' 
        mean, with respect to an infrastructure facility, any--
                    (A) preconstruction planning, feasibility review, 
                permitting and design work and other preconstruction 
                activities;
                    (B) construction, reconstruction, rehabilitation, 
                replacement, or expansion; and
                    (C) operation and maintenance.
            (3) Entity.--The term ``entity'' means an individual, 
        corporation, partnership, joint venture, trust or governmental 
        entity or instrumentality.
            (4) Infrastructure facility.--The term ``infrastructure 
        facility'' means a road, highway, bridge, tunnel, airport, mass 
        transportation vehicle or system, passenger rail vehicle or 
        system, intermodal transportation facility, waterway, 
        commercial port, drinking or waste water treatment facility, 
        solid waste disposal facility, pollution control system, 
        hazardous waste facility, federally designated national 
        information highway facility, school, and any ancillary 
        facility which forms a part of any such facility or is 
        reasonably related to such facility, whether owned, leased or 
        operated by a public entity or a private entity or by a 
        combination of such entities, and the financing or refinancing 
        of the development of which is, or will be, supported in whole 
        or in part by user fees or other dedicated revenue sources.
            (5) Insurance corporation.--The term ``Insurance 
        Corporation'' means the National Infrastructure Insurance 
        Corporation established pursuant to section 5(b).
            (6) NIC.--The term ``NIC'' means the Corporation and all 
        subsidiaries of the Corporation.
            (7) Pension plan.--The term ``pension plan'' means a 
        pension plan as defined in section 3(2) of the Employee 
        Retirement Income Security Act of 1974, including any public 
        pension plan.
            (8) Public benefit bond.--The term ``public benefit bond'' 
        means a bond or other indebtedness meeting the requirements of 
        section 72(w) of the Internal Revenue Code of 1986.
            (9) Public-private partnership.--The term ``public-private 
        partnership'' means any entity--
                    (A) which is undertaking the development of all or 
                part of any infrastructure facility--
                            (i) pursuant to requirements established in 
                        1 or more contracts between such entity and a 
                        State or an instrumentality of a State; or
                            (ii) the activities of which with respect 
                        to such facility are subject to regulation by a 
                        State or any instrumentality of a State; and
                    (B) which owns, leases, or operates, or will own, 
                lease, or operate, such infrastructure facility in 
                whole or in part, and at least 1 of the participants in 
                such entity is a nongovernmental entity.
            (10) Revolving fund.--The term ``revolving fund'' means a 
        fund or program established by a State or a political 
        subdivision or instrumentality of a State, the principal 
        activity of which is to make loans, commitments, or other 
        financial accommodation available for the development of 1 or 
        more categories of infrastructure facilities.
            (11) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury or the designee of the Secretary.
            (12) State.--The term ``State'' includes the District of 
        Columbia, Puerto Rico, Guam, American Samoa, the Trust 
        Territories of the Pacific Islands, the Virgin Islands, the 
        Northern Mariana Islands, and any territory of the United 
        States.
            (13) Transition date.--The term ``transition date'' means 
        the date on which the voting common stock of the Corporation 
        owned by the Secretary is fully repurchased or converted in 
        accordance with section 13 and the transition of the 
        Corporation to a government-sponsored enterprise in accordance 
        with such section is completed.

SEC. 5. ESTABLISHMENT OF NIC.

    (a) Establishment of National Infrastructure Development 
Corporation.--The National Infrastructure Development Corporation is 
hereby established as a wholly owned Government corporation subject to 
chapter 91 of title 31 (commonly referred to as the Government 
Corporation Control Act), except as otherwise provided in this Act.
    (b) Establishment of National Infrastructure Insurance 
Corporation.--The National Infrastructure Insurance Corporation is 
hereby established as a subsidiary of the Corporation and as a wholly 
owned Government corporation subject to chapter 91 of title 31, except 
as otherwise provided in this Act.
    (c) Self-Supporting Entities.--The Corporation and the Insurance 
Corporation shall each conduct their respective businesses as self-
supporting entities.

SEC. 6. CORPORATION'S POWERS AND LIMITATIONS.

    (a) General Powers.--In order to carry out the purposes of the 
Corporation as set forth in this Act, the Corporation shall have the 
following powers:
            (1) To make senior and subordinated loans and purchase 
        senior and subordinated debt securities (both taxable and tax 
        exempt) and equity securities, and enter into a binding 
        commitment to make any such loan or purchase any such security, 
        on such terms as the Corporation may determine, in the 
        Corporation's discretion, to be appropriate, the proceeds of 
        which are to be used to finance or refinance the development of 
        1 or more infrastructure facilities, and subject to the 
        provisions of paragraph (8) of subsection (b), provide 
        preconstruction phase assistance in accordance with section 
        8(f).
            (2) To issue and sell debt securities and voting and 
        nonvoting equity securities of the Corporation on such terms as 
        the board of directors of the Corporation may determine, 
        subject to the provisions of paragraphs (2), (3), and (4) of 
        subsection (b), to be appropriate and to pay such dividends on 
        any outstanding stock as the board of directors shall determine 
        from time to time.
            (3) To make the determinations with respect to public 
        benefit bonds pursuant to section 72(w) of the Internal Revenue 
        Code of 1986.
            (4) To make agreements and contracts with any entity in 
        furtherance of the business of the Corporation.
            (5) To make use of the services, facilities, and property 
        of any Federal agency or instrumentality, with the approval of 
        such agency or instrumentality and on a reimbursable basis, in 
        carrying out the purposes of this Act.
            (6) To acquire, lease, pledge, exchange, and dispose of 
        real and personal property and otherwise exercise all the usual 
        incidents of ownership of property to the extent the exercise 
        of such powers are appropriate to and consistent with the 
        purposes of the Corporation.
            (7) To sue and be sued in the Corporation's corporate 
        capacity in any court of competent jurisdiction, except that no 
        attachment, injunction, or similar process, mesne or final, may 
        be issued against the property of the Corporation or against 
        the Corporation with respect to such property.
            (8) To indemnify the directors and officers of the 
        Corporation for liabilities arising out of the actions of the 
        directors and officers in such capacity, in accordance with, 
        and subject to the limitations contained in, the bylaws of the 
        Corporation.
            (9) To exercise all other lawful powers which are necessary 
        or appropriate to carry out, and are consistent with, the 
        purposes of the Corporation, including the powers conferred 
        upon a corporation by the District of Columbia Business 
        Corporation Act.
    (b) Limitations on the Corporation.--
            (1) Actions consistent with self-supporting entity 
        status.--The Corporation shall conduct its business in a manner 
        consistent with the requirement of section 5(c).
            (2) Condition on debt issuance.--The Corporation shall not 
        issue any debt security under subsection (a)(2) unless, at the 
        time of the issuance thereof, such security is rated by a 
        nationally recognized statistical rating organization at 1 of 
        the 3 highest ratings of such organization.
            (3) Limitation and condition on issuance of debt and 
        nonvoting equity securities.--
                    (A) In general.--Before the transition date, the 
                Corporation shall not issue any debt security or 
                nonvoting equity security under subsection (a)(2) 
                without the prior consent of the Secretary.
                    (B) Approval of secretary for debt security after 
                transition date.--On and after the transition date, the 
                Corporation shall not issue any debt security under 
                subsection (a)(2) without the prior consent of the 
                Secretary.
            (4) Condition on voting equity issuance.--Before the 
        transition date, the Corporation shall not issue any voting 
        security to any entity other than the Secretary, and, on and 
        after the transition date, the issuance of any such security 
        shall be subject to the provisions of section 13.
            (5) Sale of voting securities of the insurance 
        corporation.--Before the transition date, voting securities of 
        the Insurance Corporation purchased by the Corporation may not 
        be sold or otherwise transferred by the Corporation.
            (6) Investments consistent with purposes of corporation.--
        In order to achieve the Corporation's purpose of effectively 
        leveraging limited Federal resources with other public and 
        private sources of capital, the Corporation shall seek to 
        maintain a significant proportion of the Corporation's 
        infrastructure investments in--
                    (A) subordinated securities; and
                    (B) securities issued with respect to 
                infrastructure facilities developed by public-private 
                partnerships.
            (7) Coordination with state and local regulatory 
        authority.--The provision of financial assistance by the 
        Corporation pursuant to this Act shall not be construed as--
                    (A) limiting the right of any State or local 
                authority to approve or regulate rates of return on 
                private equity invested in a project; or
                    (B) otherwise superseding any State law or 
                regulation applicable to a project.
            (8) Limitation on preconstruction assistance.--The 
        Corporation shall provide assistance in connection with the 
        development of any infrastructure facility during the 
        facility's preconstruction phase only in accordance with 
        section 8(f).

SEC. 7. INSURANCE CORPORATION'S POWERS AND LIMITATIONS.

    (a) General Powers.--In order to carry out the purposes of the 
Insurance Corporation as set forth in this Act, the Insurance 
Corporation shall have the following powers:
            (1) To insure and reinsure bonds, debentures, notes, debt 
        instruments, loans, and any interest in any such obligation or 
        loan, the proceeds of which are to be used to finance or 
        refinance the development of 1 or more infrastructure 
        facilities.
            (2) To insure leases of personal, real, or mixed property 
        with respect to infrastructure facilities.
            (3) To issue letters of credit and undertake such 
        obligations and commitments as the Insurance Corporation deems 
        necessary to carry out the purposes described in paragraphs (1) 
        and (2).
            (4) To issue and sell voting and nonvoting equity 
        securities on such terms as the board of directors of the 
        Insurance Corporation may determine, subject to the provisions 
        of paragraphs (5) and (6) of subsection (b), to be appropriate 
        and to pay dividends on any outstanding stock as the board of 
        directors of the Insurance Corporation shall determine from 
        time to time.
            (5) To make agreements and contracts with any entity in 
        furtherance of the business of the Insurance Corporation.
            (6) To make use of the services, facilities, and property 
        of any Federal agency or instrumentality, with the approval of 
        such agency or instrumentality and on a reimbursable basis, in 
        carrying out the purposes of this Act.
            (7) To acquire, lease, pledge, exchange, and dispose of 
        real and personal property and otherwise exercise all the usual 
        incidents of ownership of property to the extent the exercise 
        of such powers are appropriate to and consistent with the 
        purposes of the Insurance Corporation.
            (8) To sue and be sued in the Insurance Corporation's 
        corporate capacity in any court of competent jurisdiction, 
        except that no attachment, injunction, or similar process, 
        mesne or final, may be issued against the property of the 
        Insurance Corporation or against the Insurance Corporation with 
        respect to such property.
            (9) To indemnify the directors and officers of the 
        Insurance Corporation for liabilities arising out of the 
        actions of the directors and officers in such capacity, in 
        accordance with, and subject to the limitations contained in, 
        the bylaws of the Insurance Corporation.
            (10) To exercise all other lawful powers which are 
        necessary or appropriate to carry out, and are consistent with, 
        the purposes of the Insurance Corporation, including the powers 
        conferred upon a corporation by the District of Columbia 
        Business Corporation Act.
    (b) Limitations on the Insurance Corporation.--
            (1) Actions consistent with self-supporting entity 
        status.--The Insurance Corporation shall conduct its business 
        in a manner consistent with the requirement of section 5(c).
            (2) Insurance corporation rating requirement.--The 
        Insurance Corporation shall not issue any primary insurance or 
        letter of credit with respect to 1 or more infrastructure 
        facilities unless, at the time of such issuance, the Insurance 
        Corporation's claims-paying ability is then rated by a 
        nationally recognized statistical rating organization at the 
        highest rating of such organization.
            (3) Limitation on reinsurance.--The Insurance Corporation 
        may write reinsurance in respect of all or a portion of a 
        primary insurance policy with respect to 1 or more 
        infrastructure facilities issued by a bond insurer if the 
        claims-paying ability of such insurer is rated, at the time of 
        issuance of such reinsurance, by a nationally recognized 
        statistical rating organization at the highest rating of such 
        organization.
            (4) Limitation on insurance and other activities.--The 
        Insurance Corporation may issue primary insurance or a letter 
        of credit with respect to 1 or more infrastructure facilities, 
        except that not less than 75 percent of the principal amount of 
        all obligations so insured or subject of a letter of credit 
        shall be obligations which are, or based on a published or 
        indicative rating would be, without such insurance or letter of 
        credit, rated by a nationally recognized statistical rating 
        organization in the fourth or fifth rating categories of such 
        organization (BBB and BB; Baa and Ba, or their equivalents).
            (5) Prior consent of secretary.--Before the transition 
        date, the Insurance Corporation shall not issue any nonvoting 
        equity security under subsection (a)(4) without the prior 
        consent of the Secretary.
            (6) Condition on voting equity issuance.--Before the 
        transition date, the Insurance Corporation shall not issue any 
        voting security to any entity other than the Corporation.
            (7) Coordination with state and local regulatory 
        authority.--The provision of financial assistance by the 
        Insurance Corporation pursuant to this Act shall not be 
        construed as--
                    (A) limiting the right of any State or local 
                authority to approve or regulate rates of return on 
                private equity invested in a project; or
                    (B) otherwise superseding any State law or 
                regulation applicable to a project.

SEC. 8. ELIGIBILITY CRITERIA FOR ASSISTANCE FROM THE CORPORATION AND 
              THE INSURANCE CORPORATION.

    (a) General.--No financial assistance shall be available under this 
Act from the Corporation or the Insurance Corporation unless the 
applicant for such assistance has demonstrated to the satisfaction of 
the Corporation or the Insurance Corporation, as the case may be, that 
the project for which such assistance is being sought meets--
            (1) the requirements of this Act; and
            (2) any criteria established in accordance with this Act by 
        the board of directors of the Corporation or the Insurance 
        Corporation, as the case may be.
    (b) Establishment of Project Criteria.--
            (1) In general.--Consistent with the requirements of 
        subsections (c) and (d), the boards of directors of the 
        Corporation and the Insurance Corporation shall each 
        establish--
                    (A) criteria for determining eligibility for 
                financial assistance under this Act;
                    (B) disclosure and application procedures to be 
                followed by States, revolving funds, and other entities 
                to nominate projects for assistance under this Act; and
                    (C) such other criteria as the board of directors 
                of the Corporation or the Insurance Corporation may 
                consider to be appropriate for purposes of carrying out 
                this Act.
            (2) Factors to be taken into account.--The criteria 
        established pursuant to paragraph (1)(A) shall provide for the 
        consideration of the following factors in considering 
        eligibility for financial assistance under this Act:
                    (A) The extent to which provision of assistance by 
                the Corporation or the Insurance Corporation will 
                further the objectives for infrastructure investments 
                established in Executive Order No. 12893 of January 26, 
                1994, including the stated objective of providing 
                opportunities for ``innovative public-private 
                initiatives''.
                    (B) The means by which development of the 
                infrastructure facility under consideration is being 
                financed, including--
                            (i) the terms and conditions and financial 
                        structure of the proposed financing;
                            (ii) the financial assumptions and 
                        projections on which the project is based; and
                            (iii) based on consideration of clauses (i) 
                        and (ii), whether the infrastructure facility 
                        will have the capacity to be self-supporting.  
                    (C) The likelihood that the provision of assistance 
                by the Corporation or the Insurance Corporation will 
                cause such development to proceed more promptly and 
                with lower costs for financing to the public and 
                private entities engaged in developing such 
                infrastructure facility than would be the case without 
                such assistance.
                    (D) The extent to which the provision of assistance 
                by the Corporation or the Insurance Corporation 
                maximizes the level of private investment in such 
                infrastructure facility.
            (3) Limitation on conditions.--The Corporation and the 
        Insurance Corporation shall not condition the approval of 
        financial assistance for the development of any infrastructure 
        facility on a requirement that a pension plan of a State or 
        political subdivision of a State make an investment in such 
        facility.
    (c) Submission of Project Proposals.--
            (1) Acceptance of proposals.--The Corporation and the 
        Insurance Corporation shall accept, for consideration, project 
        proposals relating to the development of infrastructure 
        facilities submitted by a State, a revolving fund, or another 
        entity, subject to subsection (d), which meet the requirements 
        of subsection (b).
            (2) List of projects under consideration for assistance.--
        Project proposals accepted pursuant to paragraph (1) and 
        approved in principle shall be placed on a list of projects 
        being considered for financial assistance under this Act.
            (3) Eligibility for preconstruction assistance.--Projects 
        on the list established pursuant to paragraph (2) shall be 
        eligible to apply for preconstruction assistance in accordance 
        with subsection (f).
            (4) Subsequent approvals.--Notwithstanding the receipt of 
        any preconstruction assistance for any project, no additional 
        financial assistance under this Act for such project may be 
        provided without the specific approval by the Corporation or 
        the Insurance Corporation, as the case may be, for such 
        additional assistance.
            (5) Fees.--A fee may be charged for the review of any 
        project proposal in such amount as may be deemed appropriate by 
        the Corporation or the Insurance Corporation to cover the cost 
        of such review.
    (d) State Eligibility.--
            (1) In general.--After the end of the 3-year period 
        beginning on the date of the enactment of this Act, no 
        financial assistance may be provided by the Corporation or the 
        Insurance Corporation for the development of any infrastructure 
        facility proposed for assistance by a State, or a revolving 
        fund in a State, unless such State has in place--
                    (A) an evaluation process which is certified by the 
                Secretary, in accordance with regulations which the 
                Secretary shall prescribe before the end of the 6-month 
                period beginning on such date of enactment, as being 
                designed to ascertain the extent to which major work 
                with respect to infrastructure facilities within the 
                State can be financed by relying on any revenue 
                reasonably obtainable from such facilities and other 
                dedicated revenue sources; and
                    (B) a program which is certified by the Secretary, 
                in accordance with regulations which the Secretary 
                shall prescribe before the end of such 6-month period, 
                as being reasonably designed to promote the objective 
                set forth in Executive Order No. 12893 of January 26, 
                1994, of affording the opportunity for innovative 
                public-private initiatives with respect to major work, 
                consistent with the public interest.
            (2) Activities with nonstate entities.--After the end of 
        the 3-year period beginning on the date of the enactment of 
        this Act, the Corporation and the Insurance Corporation each 
        may continue to undertake activities with respect to projects 
        within a State relating to the development of infrastructure 
        facilities which have been submitted by entities other than 
        such State or a revolving fund in such State, including 
        municipalities, regional authorities, and private-public 
        partnerships, if the infrastructure facilities meet the 
        criteria for assistance established pursuant to subsection (b), 
        and the State or States in which such facility or facilities 
        are to be located have not met the conditions of subsection 
        (d)(1).
            (3) Major work defined.--For purposes of paragraph (1), the 
        term ``major work'' means the construction of a new 
        infrastructure facility, or the reconstruction, rehabilitation, 
        replacement, or expansion of an existing infrastructure 
        facility, involving the expenditure of more than $10,000,000.
    (e) Initial Targeting of Ready-To-Go Projects.--During the 3-year 
period beginning on the date of the enactment of this Act, the 
Corporation and the Insurance Corporation shall each seek to provide 
assistance to projects involving the development of infrastructure 
facilities which--
            (1) the Corporation or the Insurance Corporation, as the 
        case may be, determines are ready to move forward promptly; and
            (2) meet all other requirements of this Act.
    (f) Development Risk Insurance.--
            (1) In general.--Any project on the list established 
        pursuant to subsection (c)(2) shall be eligible to apply to the 
        Corporation for development risk insurance in accordance with 
        this subsection to insure against the risk of loss that would 
        result if a project does not proceed within a specified time 
        frame as the result of the failure to secure relevant permits 
        or specified Federal, State, or local approvals.
            (2) Terms and scope of coverage.--Development risk 
        insurance provided under this subsection shall--
                    (A) contain such limitations, deductibles, 
                exclusions, and exceptions as the Corporation shall 
                establish; and
                    (B) apply only to developmental costs incurred 
                after the date of the approval of the application for 
                such insurance.
            (3) Maximum on insurance of preconstruction risk.--The 
        Corporation shall not insure more than 50 percent of the 
        preconstruction phase development risk of any project, as 
        determined by the Corporation.
            (4) Additional conditions.--The Corporation may impose such 
        other conditions and requirements in connection with any 
        insurance provided under this subsection as the Corporation may 
        determine to be appropriate, including requirements for audits 
        of costs and other matters.
            (5) Fees for insurance.--The Corporation may charge such 
        fees and obtain such other compensation for providing insurance 
        coverage under this subsection as the Corporation, in the 
        Corporation's discretion, shall determine to be appropriate.
            (6) Maximum exposure of corporation.--The total outstanding 
        exposure of the Corporation with respect to insurance provided 
        under this subsection may not exceed the amount which is equal 
        to 5 percent of the sum of the capital, surplus, and retained 
        earnings of the Corporation, as measured at the time any such 
        insurance is provided.
    (g) Discretion of Corporation and Insurance Corporation.--
Consistent with other provisions of this Act, any determination of the 
Corporation or the Insurance Corporation to provide assistance to any 
project, and the manner in which such assistance is provided, including 
the terms, conditions, fees and charges in respect thereof, shall be at 
the sole discretion of the Corporation or the Insurance Corporation, as 
the case may be.
    (h) Independent Investment Committee.--Any final decision to 
provide or not provide assistance under this Act by the Corporation or 
the Insurance Corporation with respect to any specific proposal shall 
be made by an investment committee, of the respective corporation, 
which shall be comprised of senior officers of the Corporation and the 
Insurance Corporation, as the case may be, appointed to such committee 
by the respective board of directors, which committees shall not have 
any nonofficer director members.
    (i) State and Local Permits Required.--The provision of assistance 
by the Corporation or the Insurance Corporation in accordance with this 
section shall not be deemed to relieve any recipient of assistance or 
the related project of any obligation to obtain required State and 
local permits and approvals.
    (j) Annual Report.--A State, revolving fund, or other entity 
receiving assistance from the Corporation or the Insurance Corporation 
shall make annual reports to the Corporation or the Insurance 
Corporation, as the case may be, on the use of any such assistance, 
compliance with the criteria set forth in this section, and a 
disclosure of all entities with a development, ownership, or 
operational interest in a project assisted or proposed to be assisted 
pursuant to this Act.

SEC. 9. CAPITALIZATION AND ORGANIZATION OF THE CORPORATION AND THE 
              INSURANCE CORPORATION.

    (a) Capitalization.--
            (1) Capitalization of the corporation.--
                    (A) Voting common stock.--Effective for any fiscal 
                year only to such extent and in such amounts as are 
                provided in advance in appropriation Acts, the 
                Secretary shall subscribe for and purchase, in each of 
                the 3 years following the date of enactment of this 
                Act, voting common stock of the Corporation having an 
                aggregate purchase price in each year of 
                $1,000,000,000, except that no such purchase shall 
                occur after the transition date.
                    (B) Limitation on sale of securities by 
                secretary.--Securities purchased by the Secretary may 
                not be sold or otherwise transferred by the Secretary 
                unless such sale or transfer is effected pursuant to 
                section 13 or is explicitly authorized by an Act of 
                Congress.
            (2) Capitalization of the insurance corporation.--
                    (A) In general.--The Corporation may subscribe for 
                and purchase voting common stock of the Insurance 
                Corporation in such amounts and at such times as the 
                board of directors of the Corporation shall from time 
                to time consider appropriate.
                    (B) Limitation on investment by corporation.--Not 
                more than 25 percent of the capital, surplus, and 
                retained earnings of the Corporation may be invested by 
                the Corporation in the Insurance Corporation without 
                the consent of the Secretary, measured at the time of 
                any such investment.
            (3) Repurchase of outstanding obligations.--The Corporation 
        and the Insurance Corporation may purchase in the open market 
        any of their respective outstanding obligations at any time and 
        at any price.
    (b) Place of Business and Governing Law.--
            (1) Corporation.--
                    (A) Principal office.--The Corporation shall 
                maintain its principal office in the District of 
                Columbia, and shall be deemed, for purposes of venue in 
                civil actions, to be a resident of the District of 
                Columbia.
                    (B) Applicability of district of columbia business 
                corporation act.--To the extent not inconsistent with 
                this Act, the Corporation shall be subject to the 
                District of Columbia Business Corporation Act.
            (2) Insurance corporation.--
                    (A) Place of business.--The Insurance Corporation 
                shall maintain its principal office in the District of 
                Columbia, and shall be deemed, for purposes of venue in 
                civil actions, to be a resident thereof.
                    (B) Applicability of district of columbia business 
                corporation act.--To the extent not inconsistent with 
                this Act, the Insurance Corporation shall be subject to 
                the District of Columbia Business Corporation Act.
            (3) Applicability of state insurance laws.--Before the 
        transition date, the Corporation and the Insurance Corporation 
        shall not be subject to the provisions of the law of any State 
        or political subdivision of any State regulating the ownership 
        or conduct of an insurance or surety business in any 
        jurisdiction.
            (4) Exemption from taxation.--
                    (A) On and before transition date.--On and before 
                the transition date, the Corporation, the Insurance 
                Corporation, and any other subsidiary of the 
                Corporation, including the franchise, capital, 
                reserves, surplus, securities holdings, and income of 
                the Corporation, the Insurance Corporation, or any such 
                subsidiary shall be exempt from taxation now or 
                hereafter imposed by the United States, any State, or 
                any county, municipality, or local taxing authority.
                    (B) After transition date.--After the transition 
                date, the Corporation, the Insurance Corporation, and 
                any other subsidiary of the Corporation, including the 
                franchise, capital, reserves, surplus, securities 
                holdings, and income of the Corporation, the Insurance 
                Corporation, or any such subsidiary shall be exempt 
                from all taxation now or hereafter imposed by the 
                United States, any State, or any county, municipality, 
                or local taxing authority in any State, provided that 
                the Corporation, the Insurance Corporation and any 
                other subsidiary of the Corporation shall be subject to 
                Federal income taxation.

SEC. 10. MANAGEMENT OF THE CORPORATION.

    (a) Board of Directors.--
            (1) Number and appointment.--Subject to the provisions of 
        section 13, the Corporation shall have a board of directors 
        consisting of 12 members, 9 of whom shall be appointed by the 
        President.
            (2) Required expertise.--The President shall appoint 
        individuals to the board of directors of the Corporation with a 
        demonstrated experience and expertise in the general field of 
        infrastructure project development, finance, or related 
        disciplines.
            (3) Additional selection criteria.--The President shall 
        ensure that, of the nonofficer directors appointed to the board 
        of directors, a minimum of 6 shall be selected from among 
        representatives of the private sector, of which--
                    (A) 2 shall be representatives of organized labor; 
                and
                    (B) 2 shall be individuals involved in the field of 
                public-private infrastructure finance and related 
                disciplines.
            (4) Consultation with the national governors' conference.--
        The President shall select 2 of the nonofficer directors to be 
        appointed to the board of directors after consulting with and 
        considering the recommendations of the National Governors' 
        Conference.
            (5) Appointment of officers to the board.--A majority of 
        the nonofficer members of the board shall appoint the president 
        of the Corporation who shall serve on the board of directors. 
        The president of the Corporation shall select 2 executive 
        officers to be appointed to the board, subject to confirmation 
        by a majority of the board.
            (6) Terms.--
                    (A) Presidential appointees.--Each director 
                appointed by the President shall be appointed for a 
                term of 4 years, except as provided in subparagraph 
                (B).
                    (B) Initial presidential appointees.--As designated 
                by the President, of the directors first appointed by 
                the President--
                            (i) \1/3\ shall be appointed for a term of 
                        2 years;
                            (ii) \1/3\ shall be appointed for a term of 
                        3 years; and
                            (iii) \1/3\ shall be appointed for a term 
                        of 4 years.
                    (C) Officer directors.--Officer directors of the 
                Corporation shall serve for a period of 1 year or until 
                they cease to be an officer of the Corporation.
                    (D) Interim appointments.--Any director appointed 
                to fill a vacancy occurring before the expiration of 
                the term for which the director's predecessor was 
                appointed shall be appointed only for the remainder of 
                that term.
                    (E) Continuation of service.--A director may serve 
                after the expiration of that director's term until a 
                successor has taken office.
            (7) Vacancies.--A vacancy in the board of directors shall 
        be filled in the manner in which the original appointment was 
        made.
            (8) Reappointment.--
                    (A) Presidential appointees.--Members of the board 
                of directors appointed by the President may be 
                reappointed by the President, consistent with the 
                requirements of this section.
                    (B) Officer directors.--The president of the 
                Corporation shall be reappointed to the board by the 
                nonofficer directors for so long as such individual 
                continues to serve as president of the Corporation. 
                Officer directors of the board selected by the 
                president of the Corporation may be reappointed by the 
                president of the Corporation, consistent with the 
                requirements of this section.
            (9) Removal.--
                    (A) Presidential appointees.--A director appointed 
                by the President shall be subject to removal only for 
                cause.
                    (B) Officer directors.--Officer directors of the 
                Corporation shall be subject to removal from the board 
                in the discretion of a majority of the board, except 
                that the president of the Corporation shall continue to 
                serve on the board for so long as he or she serves as 
                president of the Corporation.
            (10) Quorum.--7 directors shall constitute a quorum.
            (11) Chairperson.--The chairperson of the board of 
        directors shall be selected by a majority of the board from 
        among the nonofficer directors of the board, and shall serve 
        for a period of 1 year, or until a new chairperson is selected.
            (12) Status and compensation of board members.--
                    (A) Nonofficer directors.--Members of the board of 
                directors who are not officers of the Corporation shall 
                serve on a part-time basis and shall receive a per 
                diem, when engaged in the actual performance of 
                Corporation business, plus reasonable reimbursement for 
                travel, subsistence and other necessary expenses 
                incurred in the performance of their duties.
                    (B) Officer directors.--Members of the board of 
                directors who are officers of the Corporation shall not 
                be entitled to receive any salary or other compensation 
                for services as a director of the Corporation, but may 
                receive reasonable reimbursement for travel, 
                subsistence and other necessary expenses incurred in 
                the performance of their duties as directors of the 
                Corporation.
            (13) Conflicts of interest.--
                    (A) In general.--Nonofficer directors shall have no 
                responsibility for, and shall not seek to influence, 
                any decision of the independent investment committee 
                established pursuant to section 8(h).
                    (B) Consultation.--Notwithstanding subparagraph 
                (A), the investment committee may, in the committee's 
                discretion and on the committee's own initiative, 
                consult with the board of directors as the committee 
                sees fit.
                    (C) Limitation on consultation.--No nonofficer 
                director of the Corporation who has, or is affiliated 
                with a person who has, an interest in any project under 
                consideration for assistance under this Act shall 
                participate in any consultation under subparagraph (B) 
                with respect to such project.
            (14) Meetings.--The board of directors shall meet at any 
        time pursuant to the call of the chairperson or a majority of 
        the directors and as provided by the bylaws of the Corporation, 
        but not less than once each calendar quarter.
            (15) Duties.--In addition to any duties established under 
        this Act and the bylaws of the Corporation, the board of 
        directors shall determine the general policies which shall 
        govern the operations of the Corporation in accordance with 
        this Act.
            (16) Delegation of authority.--The board of directors may 
        delegate duties and powers of the board to such committees of 
        the board as the board may determine to be appropriate.
    (b) Officers of the Corporation.--
            (1) President of the corporation.--The president of the 
        Corporation shall be the chief executive officer of the 
        Corporation, with such executive functions, powers, and duties 
        as may be prescribed by this Act, the bylaws, or the board of 
        directors.
            (2) Appointment of officers.--The president of the 
        Corporation shall, with the approval of a majority of the 
        board, appoint qualified individuals to such executive officer 
        positions as may be provided for in the bylaws of the 
        Corporation, and shall define their duties. The president may 
        appoint, remove, fix the compensation of, and define the duties 
        of other officers as provided in the bylaws.
            (3) Compensation.--The compensation of the president and 
        the executive officers of the Corporation shall be determined 
        by the board of directors of the Corporation, in the discretion 
        of the board of directors.
            (4) Conflicts of interest.--Officers of the Corporation 
        shall not participate in any review or decision affecting a 
        project under consideration for assistance under this Act if 
        such officer has, or is affiliated with a person who has, an 
        interest in such project.
            (5) Removal.--Any executive officer of the Corporation may 
        be removed in the discretion of a majority of the board of 
        directors.

SEC. 11. MANAGEMENT OF THE INSURANCE CORPORATION.

    (a) Board of Directors.--
            (1) Number and election.--Subject to the provisions of 
        section 13, the Insurance Corporation shall have a board of 
        directors consisting of 12 members elected by the stockholders 
        of the Insurance Corporation.
            (2) Initial appointment of directors.--The initial 
        directors of the Insurance Corporation shall be appointed by 
        the board of directors of the Corporation.
            (3) Required expertise.--The board shall be comprised of 
        individuals who have a demonstrated expertise and experience in 
        the field of credit enhancement or insurance and related 
        disciplines, a minimum of 9 of whom shall be selected from 
        among representatives of the private sector.
            (4) Terms.--
                    (A) In general.--Each director shall be elected or 
                appointed for a term of 2 years, except as provided in 
                subparagraph (B).
                    (B) Interim appointments.--Any director elected or 
                appointed to fill a vacancy occurring before the 
                expiration of the term for which the director's 
                predecessor was appointed shall be elected or appointed 
                only for the remainder of that term.
                    (C) Continuation of service.--A director may serve 
                after the expiration of that director's term until a 
                successor has taken office.
            (5) Vacancies.--A vacancy in the board of directors shall 
        be filled in the manner in which the original appointment was 
        made, except that the bylaws may provide for the appointment by 
        the board of directors of a director to fill a vacancy 
        occurring before the expiration of the term for which the 
        director's predecessor was elected or appointed.
            (6) Quorum.--7 directors shall constitute a quorum.
            (7) Chairperson.--
                    (A) Election.--The chairperson of the board of 
                directors shall be elected by the board of directors 
                from among the directors on the board.
                    (B) Term.--The term of office of the chairperson 
                shall be 1 year or until a new chairperson is elected.
            (8) Status and compensation of board members.--Members of 
        the board of directors shall serve on a part-time basis and 
        shall receive a per diem, when engaged in the actual 
        performance of Insurance Corporation business, plus reasonable 
        reimbursement for travel, subsistence and other necessary 
        expenses incurred in the performance of their duties.
            (9) Conflicts of interest.--
                    (A) In general.--Nonofficer directors shall have no 
                responsibility for, and shall not seek to influence, 
                any decision of the independent investment committee 
                established pursuant to section 8(h).
                    (B) Consultation.--Notwithstanding subparagraph 
                (A), the investment committee may, in the committee's 
                discretion and on the committee's own initiative, 
                consult with the board of directors as the committee 
                sees fit.
                    (C) Limitation on consultation.--No director who 
                has, or is affiliated with any person who has, an 
                interest in any project under consideration for 
                assistance under this Act shall participate in any such 
                consultation with respect to such project.
            (10) Meetings.--The board of directors shall meet at any 
        time pursuant to the call of the chairperson or a majority of 
        the directors and as provided by the bylaws of the Insurance 
        Corporation, but not less than once each calendar quarter.
            (11) Duties.--In addition to any duties established under 
        this Act or the bylaws of the Insurance Corporation, the board 
        of directors shall determine the general policies which shall 
        govern the operations of the Insurance Corporation in 
        accordance with this Act.
            (12) Delegation of authority.--The board of directors may 
        delegate duties and powers of the board to such committees of 
        the board as the board may determine to be appropriate.
    (b) Officers of the Insurance Corporation.--
            (1) President of the insurance corporation.--There shall be 
        a position of president of the Insurance Corporation who shall 
        be the chief executive officer of the Insurance Corporation, 
        with such executive functions, powers, and duties as may be 
        prescribed by the bylaws or by the board of directors.
            (2) Appointment of officers.--The chairperson of the board 
        of directors of the Insurance Corporation shall, with the 
        approval of a majority of the board, appoint a qualified 
        individual to the position of president of the Insurance 
        Corporation. The president of the Insurance Corporation shall, 
        with the approval of a majority of the board, appoint qualified 
        individuals to such executive officer positions as may be 
        provided for in the bylaws of the Insurance Corporation, and 
        shall define their duties. The president may appoint, remove, 
        fix the compensation of, and define the duties of other 
        officers as provided in the bylaws.
            (3) Compensation.--The compensation of the president and 
        the executive officers of the Insurance Corporation shall be 
        determined by the board of directors of the Insurance 
        Corporation, in the discretion of the board of directors.
            (4) Conflicts of interest.--Officers of the Insurance 
        Corporation shall not participate in any review or decision 
        affecting a project under consideration for assistance under 
        this Act if such officer has, or is affiliated with a person 
        who has, an interest in such project.
            (5) Removal.--Any executive officer of the Insurance 
        Corporation may be removed in the discretion of a majority of 
        the board of directors.

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

    (a) General.--All meetings of the full board of directors held to 
conduct the business of the Corporation or the Insurance Corporation 
shall be open to the public, and shall be preceded by reasonable 
notice.
    (b) Closed Meetings.--Pursuant to such rules as the Corporation and 
the Insurance Corporation may establish through their bylaws, the 
respective board of directors may close a meeting of the board if at 
the meeting there is likely to be disclosed information which could 
adversely affect or lead to speculation relating to an infrastructure 
project under consideration for assistance under this Act, or in 
financial or securities or commodities markets or institutions, 
utilities, or real estate. The determination to close any meeting of 
either board of directors shall be made in a meeting of such board, 
open to the public, and preceded by reasonable notice. The respective 
board of directors shall prepare minutes of any meeting which is closed 
to the public and make such minutes available as soon as the 
considerations necessitating closing such meeting no longer apply.

SEC. 13. TRANSITION TO GOVERNMENT-SPONSORED ENTERPRISE.

    (a) General.--Within 5 years after the date of this Act, the 
Corporation shall prepare a strategic plan for the transition of NIC to 
a government-sponsored enterprise (as defined in section 3(8) of the 
Congressional Budget and Impoundment Control Act of 1974) and for the 
sale or transfer to investors other than the Federal Government, as set 
forth in subsection (b), of the voting securities of the Corporation. 
The Corporation shall revise such transition plan as needed.
    (b) Plan; Pension Plan Participation.--
            (1) In general.--The strategic plan shall include 
        consideration of alternative means for effecting such 
        transition through a broad distribution to long-term investors, 
        including by a public offering of stock or convertible stock or 
        debt.
            (2) Pension plan participation.--The strategic plan shall 
        include provisions that specify that the initial purchasers of 
        voting securities of the Corporation or of nonvoting securities 
        which are convertible to such voting securities on the 
        transition date (disregarding any underwriters of such 
        securities) shall be pension plans.
    (c) Means of Transfer.--
            (1) In general.--The strategic plan may call for a phased 
        transfer of ownership or for complete transfer at a single 
        point in time.
            (2) Rules applicable in the case of a phased transition.--
        If the plan calls for phased transfer of ownership--
                    (A) such transition shall be deemed to occur when 
                100 percent of the voting securities of the Corporation 
                have been transferred to or are held by investors other 
                than the Federal Government, and the investment of the 
                Federal Government in the Corporation has been repaid 
                or converted as provided in subsection (h);
                    (B) before the transition date, all equity 
                securities of the Corporation held by investors other 
                than the Federal Government (or any equity security 
                into which any other security is convertible) shall be 
                nonvoting securities; and
                    (C) on and after the transition date, nonvoting 
                equity securities of the Corporation held by investors 
                other than the Federal Government (or into which other 
                securities are convertible) may, in accordance with the 
                terms of such securities, be converted or become 
                convertible into voting securities.
    (d) Requirement of Presidential Approval.--The Corporation may not 
implement the transition plan without the approval of the President, 
and shall seek reapproval if the plan is materially altered.
    (e) Notification of Congress.--
            (1) In general.--The Corporation shall notify the Congress 
        of--
                    (A) the Corporation's intent to implement the 
                transition plan; and
                    (B) any material alteration of a transition plan 
                previously submitted to the Congress.
            (2) Report.--Within 30 days of any notification of the 
        Congress under paragraph (1), the Comptroller General of the 
        United States shall submit a report to Congress evaluating the 
        extent to which--
                    (A) the transition plan (as then modified) would 
                result in ongoing obligations (other than contemplated 
                by subsection (h)) or undue cost to the Federal 
                Government; and
                    (B) the cash proceeds (or projected range thereof) 
                to be provided to the Federal Government, or the 
                securities proposed to be received in exchange for the 
                investment of the Federal Government in the Corporation 
                or portion thereof, represents the full recoupment of 
                such investment (after taking into account any 
                dividends paid to the Federal Government).
    (f) Congressional Review.--The Corporation may implement the plan 
not less than 60 days after notification of the Congress, if the 
approval of the President referred to in subsection (d) has been 
received.
    (g) Deposit of Proceeds.--Any cash proceeds receivable by the 
Federal Government pursuant to this section shall be deposited in the 
general fund of the Treasury.
    (h) Conversion of Federal Government Investment.--Upon the 
implementation of the transition plan, the voting equity securities of 
the Corporation held by the Federal Government or, in the case of a 
phased transition, that portion of the voting equity securities which 
are subject to such phase shall be repurchased by the Corporation or 
converted to long-term subordinated debt securities having a par amount 
not less than the amounts appropriated pursuant to section 19 and 
subject to such phase, or a combination thereof, as contemplated by 
such plan.
    (i) Board of Directors.--
            (1) Corporation.--
                    (A) Initial board.--Before the end of the 120-day 
                period beginning on the transition date, a special 
                meeting of the stockholders of the Corporation shall be 
                held, at which all directors of the Corporation shall 
                be elected to serve a 1-year term or until any such 
                director's successor has been elected.
                    (B) Nomination; selection criteria.--The candidates 
                for election to the board of directors under paragraph 
                (1) shall be nominated by the existing board of 
                directors and 4 of such candidates shall be nominated 
                in accordance with the selection criteria set out in 
                section 10(a)(3).
                    (C) Subsequent boards.--After the 1st election of a 
                board of directors pursuant to subparagraph (A), the 
                directors shall be elected and subject to removal by 
                the stockholders of the Corporation, as provided in the 
                District of Columbia Business Corporation Act, except 
                that the nomination of candidates for each election of 
                the board of directors shall continue to reflect the 
                requirements of section 10(a)(3).
            (2) Insurance corporation.--
                    (A) Initial board.--Promptly following the special 
                meeting of the stockholders of the Corporation pursuant 
                to paragraph (1), a special meeting of the stockholders 
                of the Insurance Corporation shall be held, at which 
                all directors or the Insurance Corporation shall be 
                elected to serve a 1-year term or until any such 
                director's successor has been elected.
                    (B) Subsequent boards.--After the 1st election of a 
                board of directors pursuant to subparagraph (A), the 
                directors shall be elected and subject to removal by 
                the stockholders of the Insurance Corporation, as 
                provided in the District of Columbia Business 
                Corporation Act.
    (j) Transmittal of Final Plan After Completion.--The Corporation 
shall transmit copies of the final strategic plan for transition to the 
President and the Congress upon completion of such transition.

SEC. 14. STATUS AND APPLICABILITY OF CERTAIN FEDERAL LAWS.

    (a) Before the Transition Date.--Before the transition date, the 
Corporation, the Insurance Corporation, and any other subsidiary of the 
Corporation, shall--
            (1) not be agencies of the United States; and
            (2) comply with all Federal laws regulating the budgetary 
        and auditing practices of a government corporation, except as 
        otherwise provided in this Act.
    (b) Subsequent to the Transition Date.--On and after the transition 
date, the Corporation, the Insurance Corporation, and any other 
subsidiary of the Corporation shall not be considered to be an agency, 
instrumentality, or establishment of the United States Government or a 
government corporation or a government-controlled corporation, for 
purposes of any Federal law, except as otherwise provided in this Act.
    (c) Authorized Investments and Security.--All obligations issued by 
the Corporation shall be authorized investments for any person created 
under the laws of the United States or any State to the same extent 
that the person may hold or invest in obligations issued by or 
guaranteed as to principal or interest by the United States or any 
agency or instrumentality of the United States.
    (d) Effect of and Exemptions From Other Laws.--
            (1) Exempt securities.--All equity and debt securities and 
        other obligations issued by the Corporation or the Insurance 
        Corporation pursuant to this Act shall be deemed to be exempt 
        securities within the meaning of laws administered by the 
        Securities and Exchange Commission to the same extent as 
        securities which are direct obligations of, or obligations 
        fully guaranteed as to principal or interest by, the United 
        States.
            (2) Open market operations and state tax exempt status.--
        The obligations of the Corporation shall be deemed to be 
        obligations of the United States for the purposes of the 
        provision designated as (b)(2) of the 2nd undesignated 
        paragraph of section 14 of the Federal Reserve Act and section 
        3124 of title 31, United States Code.
            (3) No priority as a federal claim.--The priority 
        established in favor of the United States by section 3713 of 
        title 31, United States Code, shall not apply with respect to 
        any indebtedness of the Corporation or the Insurance 
        Corporation.
    (e) Federal Reserve Banks as Depositaries, Custodians, and Fiscal 
Agents.--The Federal reserve banks may act as depositaries for, or 
custodians or fiscal agents of, the Corporation and the Insurance 
Corporation.
    (f) Access to Book-Entry System.--The Secretary may authorize the 
Corporation and the Insurance Corporation to use the book-entry system 
of the Federal reserve system.

SEC. 15. COMPLIANCE WITH DAVIS-BACON ACT.

    NIC shall take such action as may be necessary to ensure that 
projects assisted in whole or in part under the provisions of this Act 
shall incorporate a provision requiring in any contract relating to any 
construction, reconstruction, rehabilitation, replacement, or expansion 
of such project, that not less than the wages prevailing in the 
locality, as predetermined by the Secretary of Labor pursuant to the 
Act of March 3, 1931 (40 U.S.C. 276a; commonly referred to as the 
``Davis-Bacon Act'') shall be paid to all laborers and mechanics 
employed to perform such contracts.

SEC. 16. OBLIGATIONS NOT FEDERALLY GUARANTEED; STATE LAWS.

    (a) Status of Securities.--
            (1) No full faith and credit of the u.s.--Obligations of 
        the Corporation or the Insurance Corporation, and obligations 
        insured by any such corporation shall not be obligations of, or 
        guaranteed as to principal or interest by, the United States or 
        any agency of the United States and the obligations shall so 
        plainly state.
            (2) Financing not treated as u.s. guarantee.--The provision 
        of assistance of any kind or nature from NIC shall not be 
        treated as a direct or indirect guarantee of any payment of 
        principal or interest on any security by the United States for 
        purposes of section 149(b) of the Internal Revenue Code of 1986 
        or any other law.
    (b) State Laws.--The receipt by any entity of any assistance under 
this Act, directly or indirectly, and any financial assistance provided 
by any governmental entity in connection with such assistance under 
this Act shall be valid and lawful notwithstanding any State or local 
restrictions regarding extensions of credit or other benefits to 
private persons or entities, or other similar restrictions.

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

    (a) Accounting.--The books of account of NIC shall be maintained in 
accordance with generally accepted accounting principles and shall be 
subject to an annual audit by independent public accountants of 
nationally recognized standing.
    (b) Reports.--NIC shall submit to the President and the Congress, 
within 90 days after the end of each fiscal year, a complete and 
detailed report with respect to the preceding fiscal year, setting 
forth--
            (1) a summary of NIC's operations, for such preceding 
        fiscal year;
            (2) NIC's financial statements and the opinion with respect 
        thereto prepared by the independent public accountant reviewing 
        such statements and a copy of any report made on an audit 
        conducted under subsection (a) of this section;
            (3) a schedule of NIC's obligations and capital securities 
        outstanding at the end of such fiscal year, with a statement of 
        the amounts issued and redeemed or paid during such fiscal 
        year; and
            (4) the status of projects receiving funding or other 
        assistance pursuant to this Act, including disclosure of all 
        entities with a development, ownership, or operational interest 
        in such projects.
    (c) Books and Records.--
            (1) In general.--NIC shall maintain adequate books and 
        records to support the financial transactions of the 
        Corporation, the Insurance Corporation, and subsidiaries of 
        such corporations.
            (2) Audits by the secretary and gao.--The books and records 
        of NIC shall be maintained in accordance with recommended 
        accounting practices and shall be open to inspection by the 
        Secretary and the Comptroller General of the United States.

SEC. 18. TAX TREATMENT OF DISTRIBUTIONS FROM QUALIFIED RETIREMENT PLANS 
              INVESTING IN PUBLIC BENEFIT BONDS.

    (a) In General.--Section 72 of the Internal Revenue Code of 1986 
(relating to annuities; certain proceeds of endowment and life 
insurance contracts) is amended by redesignating subsection (w) as 
subsection (x) and by inserting after subsection (v) the following new 
subsection:
    ``(w) Treatment of Distribution From Qualified Retirement Plans 
Investing in Public Benefit Bonds.--
            ``(1) In general.--In the case of any qualified retirement 
        plan which receives directly or indirectly any interest on any 
        public benefit bond (including any payments in respect thereof 
        made by a surety or guarantor) for purposes of applying this 
        section to any distribution from such plan, the distributee's 
        investment in the contract shall be treated as including such 
        distributee's allocable share of such interest under the terms 
        of the qualified retirement plan, and any such distribution 
        shall be treated as a distribution described in subsection 
        (e)(2)(B) in which the distribution is allocable first to the 
        investment in the contract attributable to such interest.
            ``(2) Treatment of installments.--In the case of a 
        distribution to be made over more than one calendar year, the 
        amount of public benefit bond interest to be taken into account 
        with respect to a given calendar year shall be the aggregate 
        amount of such interest allocable to the distributee as of the 
        end of the prior calendar year. With respect to the final 
        calendar year, the amount of public benefit bond interest to be 
        taken into account shall include the amount of such interest 
        received by the plan during such year that is allocable to the 
        plan participant with respect to whom the distribution is made.
            ``(3) Public benefit bond.--For purposes of this 
        subsection, the term `public benefit bond' means any obligation 
        issued after the date of the enactment of this subsection if--
                    ``(A) 95 percent or more of the net proceeds of 
                such obligation are used in connection with the 
                financing or refinancing of 1 or more infrastructure 
                facilities,
                    ``(B) such obligation has received a published 
                rating, and
                    ``(C) the development of such infrastructure 
                facilities have been or will be undertaken by a 
                governmental entity or public-private partnership,
        as such terms are defined in section 4 of the National 
        Infrastructure Development Act of 1996.
            ``(4) Certification of infrastructure facilities.--An 
        issuer of an obligation of which 95 percent or more of the net 
        proceeds are to be used in connection with the financing or 
        refinancing of 1 or more facilities may apply to the National 
        Infrastructure Development Corporation, in accordance with such 
        procedures as such corporation may establish, for certification 
        that any such facility is an infrastructure facility (as 
        defined in section 4 of the National Infrastructure Development 
        Act of 1996). Certification by the Corporation shall create a 
        presumption of such status, but shall not be binding on the 
        Secretary.
            ``(5) Legend required.--No obligation shall be a public 
        benefit bond for purposes of this subsection unless it is 
        designated as intended to be a public benefit bond on the date 
        of issuance and bears a legend to such effect.
            ``(6) Qualified retirement plan.--For purposes of this 
        subsection, the term `qualified retirement plan' means--
                    ``(A) a qualified retirement plan (as defined in 
                section 4974(c)), and
                    ``(B) an eligible deferred compensation plan (as 
                defined in section 457(b)).
            ``(7) Treatment of dividends from mutual funds.--
                    ``(A) In general.--For purposes of this subsection, 
                in the case of any dividend (other than a dividend 
                described in section 854(a)) received from a regulated 
                investment company which meets the requirements of 
                section 852 for the taxable year in which it paid the 
                dividend--
                            ``(i) the entire amount of such dividend 
                        shall be treated as interest on a public 
                        benefit bond if the aggregate interest on such 
                        bonds received by such company during the 
                        taxable year equals or exceeds 75 percent of 
                        its gross income, or
                            ``(ii) if clause (i) does not apply, a 
                        portion of such dividend shall be treated as 
                        interest on a public benefit bond based on the 
                        portion of the company's gross income which 
                        consists of such interest.
                    ``(B) Notice to shareholders.--The amount of any 
                distribution by a regulated investment company which 
                may be taken into account as interest on a public 
                benefit bond for purposes of this section shall not 
                exceed the amount so designated by the company in a 
                written notice to its shareholders mailed not later 
                than 45 days after the close of its taxable year.
                    ``(C) Gross income.--For purposes of this section, 
                the term `gross income' does not include gain from the 
                sale or other disposition of stock or securities.''.
    (b) Conforming Amendments.--
            (1) Subsection (w) of section 72 of the Internal Revenue 
        Code of 1986 is amended by adding the following new paragraph:
            ``(4) Treatment of qualifying public benefit bond 
        interest.--For purposes of subsections (c)(1)(A) and (c)(2)(A), 
        the total amount of public benefit bond interest described in 
        subsection (w) with respect to a participant in a qualified 
        retirement plan (determined without reference to the annuity 
        starting date) shall be treated as an investment in the 
        contract.''.
    (c) Effective Date.--The amendment made this section shall apply to 
distributions after the date of the enactment of this Act.

SEC. 19. AUTHORIZATIONS.

    (a) Appropriations Authorized for Establishment.--There are hereby 
authorized to be appropriated to the Secretary $30,000,000 for the 
purpose of facilitating the NIC's initial operations.
    (b) Appropriations Authorized for Conduct of Business of NIC.--
There are authorized to be appropriated to the Secretary $1,000,000,000 
for each of the fiscal years 1997 through 1999 to make the capital 
contributions in accordance with section 9(a)(1)(A) for the purpose of 
carrying out this Act.
    (c) Establishment of NIC Account.--Before the transition date, the 
funds appropriated under subsection (b) shall be deposited in an 
account to be established in the Treasury of the United States to be 
known as the ``National Infrastructure Development Corporation 
Account'', which shall be available to the Corporation, without need 
for further appropriation and without fiscal year limitation, for 
carrying out its purposes, functions and powers, including the 
investment and reinvestment of these funds as permitted in this Act, 
and which shall not be subject to apportionment under subchapter II of 
chapter 15 of title 31. The Secretary of the Treasury, in consultation 
with the board of directors of the Corporation, shall invest amounts in 
the account in public debt securities with maturities suitable to the 
needs of the account and bearing interest at rates determined by the 
Secretary, taking into consideration current market yields on 
outstanding marketable obligations of the United States of comparable 
maturities.

SEC. 20. PROHIBITION ON ADDITIONAL FEDERAL ASSISTANCE.

    Except as otherwise specifically provided by sections 13 and 19, 
NIC shall receive no appropriations, loans, or other financial 
assistance from the Federal Government.
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