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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3978 Introduced in House (IH)]

113th CONGRESS
  2d Session
                                H. R. 3978

To authorize the Secretary of Transportation to establish a pedestrian 
  and bicycle infrastructure credit assistance pilot program, and for 
                            other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            January 29, 2014

 Mr. Sires (for himself, Mr. Carson of Indiana, Ms. Ros-Lehtinen, and 
 Mr. Diaz-Balart) introduced the following bill; which was referred to 
           the Committee on Transportation and Infrastructure

_______________________________________________________________________

                                 A BILL

 
To authorize the Secretary of Transportation to establish a pedestrian 
  and bicycle infrastructure credit assistance pilot program, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``New Opportunities 
for Bicycle and Pedestrian Infrastructure Financing Act of 2014''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Authority to provide assistance.
Sec. 4. Eligible entities.
Sec. 5. Projects eligible for assistance.
Sec. 6. Applications.
Sec. 7. Determination of eligibility and project selection.
Sec. 8. Secured loans and loan guarantees.
Sec. 9. Program administration.
Sec. 10. State and local permits.
Sec. 11. Definitions.
Sec. 12. Regulations.
Sec. 13. Funding.
Sec. 14. Report to Congress.

SEC. 2. PURPOSES.

    The purposes of this Act are as follows:
            (1) To promote investment in bicycling and walking 
        infrastructure to create and connect transportation networks.
            (2) To improve access to employment, business districts, 
        and transit in communities traditionally underserved by 
        existing transportation systems by establishing additional 
        opportunities for financing nonmotorized infrastructure 
        projects.
            (3) To attract new investment to business districts and 
        neighborhoods in low-income communities.
            (4) To leverage Federal funds and private investment in 
        low-income communities and those traditionally underserved by 
        existing transportation systems.

SEC. 3. AUTHORITY TO PROVIDE ASSISTANCE.

    The Secretary of Transportation may provide financial assistance 
under this Act to eligible entities to carry out bicycle and pedestrian 
infrastructure projects selected for such assistance under this Act.

SEC. 4. ELIGIBLE ENTITIES.

    In this Act, the term ``eligible entity'' means the following:
            (1) A corporation.
            (2) A public/private partnership.
            (3) A joint venture.
            (4) A trust.
            (5) A State infrastructure financing authority.

SEC. 5. PROJECTS ELIGIBLE FOR ASSISTANCE.

    Financial assistance may be provided under this Act only for the 
following types of projects:
            (1) A project for the construction, planning, and design of 
        on-road and off-road pathways for pedestrians, bicyclists, and 
        other nonmotorized forms of transportation to create a 
        comprehensive and connected transportation system, including 
        sidewalks, bicycling infrastructure and parking, pedestrian and 
        bicycle signals, traffic calming techniques, lighting and other 
        safety-related infrastructure, and transportation projects to 
        achieve compliance with the American with Disabilities Act of 
        1990 (42 U.S.C. 12101 et seq.).
            (2) A project for the construction, planning, and design of 
        infrastructure-related projects and systems that connect 
        existing infrastructure to create a network and improve safety 
        and access for nonmotorized users to transit, schools, and 
        commercial areas.
            (3) Innovative infrastructure for bicycling and walking, 
        such as designs included in the National Association of City 
        Transportation Officials guide for urban street design, to 
        enhance the ability of communities to develop solutions to 
        increase nonmotorized travel.
            (4) A project for the conversion and use of abandoned 
        railroad corridors for trails for pedestrians, bicyclists, or 
        other nonmotorized transportation users to connect to or expand 
        an existing network of bicycle and pedestrian facilities.
            (5) A bike share program as a standalone project or in 
        conjunction with other infrastructure projects.

SEC. 6. APPLICATIONS.

    (a) In General.--The Secretary shall provide for eligible entities 
to submit applications for selection of eligible projects to receive 
financial assistance under this Act at such time, in such manner, and 
containing such information as the Secretary may require.
    (b) Combined Projects.--The Secretary shall provide, only in the 
case of a State infrastructure financing authority, that such an entity 
may submit a single application for a combination of projects, each of 
which is an eligible project under section 8(b).

SEC. 7. DETERMINATION OF ELIGIBILITY AND PROJECT SELECTION.

    (a) Selection of Projects.--Using the selection criteria under 
subsection (d), the Secretary shall select, from applications submitted 
pursuant under this Act, eligible projects that meet the criteria under 
subsections (b) and (c) for financial assistance under this Act.
    (b) Activities Eligible for Assistance.--Amounts from a loan made 
or guaranteed under this Act provided for an eligible project may be 
used to pay the costs of carrying out such project, including costs 
of--
            (1) development-phase activities, including planning, 
        feasibility analysis, revenue forecasting, environmental 
        review, permitting, preliminary engineering and design work, 
        and other preconstruction activities;
            (2) construction, reconstruction, rehabilitation, and 
        replacement activities;
            (3) the acquisition of real property (including land 
        relating to the project and improvements to land), 
        environmental mitigation, construction contingencies, and 
        acquisition of equipment;
            (4) capitalized interest necessary to meet market 
        requirements, reasonably required reserve funds, capital 
        issuance expenses, and other carrying costs during 
        construction; and
            (5) refinancing interim construction funding, long-term 
        project obligations, or a secured loan or loan guarantee made 
        under this Act.
    (c) Project Requirements.--An eligible project may not be selected 
to receive financial assistance under this Act unless the Secretary 
determines that the project meets all of the following criteria:
            (1) Creditworthiness.--
                    (A) In general.--Subject to subparagraph (B), the 
                project shall be creditworthy, as determined by the 
                Secretary as applicable, to ensure that any financing 
                for the project has appropriate security features, such 
                as a rate covenant, to ensure repayment.
                    (B) Preliminary rating opinion letter.--The 
                Secretary shall require an applicant for each project 
                to provide, as part of the application for the project 
                under this section, a preliminary rating opinion letter 
                from at least one rating agency indicating that the 
                senior project obligations of the project (which may be 
                the Federal credit instrument) have the potential to 
                achieve an investment-grade rating.
                    (C) Special rule for certain combined projects.--
                The Secretary shall develop a credit evaluation process 
                for a Federal credit instrument provided to a State 
                infrastructure financing authority for a project 
                described in subsection (b), which may include 
                requiring the provision of a preliminary rating opinion 
                letter from at least one rating agency.
            (2) Eligible project costs.--The costs of an eligible 
        project shall be reasonably anticipated to be not less than 
        $2,000,000.
            (3) Dedicated revenue sources.--The Federal credit 
        instrument for the project shall be repayable, in whole or in 
        part, from dedicated revenue sources that also secure the 
        project obligations.
            (4) Public sponsorship of private entities.--In the case of 
        a project carried out by an entity that is not a State or local 
        government or an agency or instrumentality of a State or local 
        government, the project shall be publicly sponsored.
            (5) Public involvement process.--The applicant shall show 
        evidence of having incorporated a public involvement process in 
        the application, and plans for continued public involvement 
        through the implementation of the process. The public 
        involvement processes shall be proactive and provide complete 
        information, timely public notice, full public access to key 
        decisions, and opportunities for early and continuing 
        involvement. The processes shall provide for--
                    (A) reasonable public access to technical and 
                policy information used in the development of the 
                application;
                    (B) adequate public notice of public involvement 
                activities and time for public review and comment at 
                key decision points;
                    (C) a process for demonstrating explicit 
                consideration and response to public input during the 
                planning and program development process; and
                    (D) a process for seeking out and considering the 
                needs of those traditionally underserved by existing 
                transportation systems, such as low-income and minority 
                households which may face challenges accessing 
                employment and other amenities.
    (d) Selection Among Eligible Projects.--
            (1) Establishment.--The Secretary shall establish a rolling 
        application process in which projects that are eligible to 
        receive credit assistance under subsection (a) shall receive 
        credit assistance on terms acceptable to the Secretary, if 
        adequate funds are available to cover the subsidy costs 
        associated with the Federal credit instrument.
            (2) Adequate funding not available.--If the Secretary fully 
        obligates funding to eligible projects in a given fiscal year, 
        and adequate funding is not available to fund a credit 
        instrument, a project sponsor of an eligible project may elect 
        to enter into a master credit agreement and wait until the 
        following fiscal year or until additional funds are available 
        to receive credit assistance.
    (e) Low-Income Communities.--The Secretary shall ensure that not 
less that 25 percent of funds under this section are used to support 
projects in low-income communities.
    (f) Federal Requirements.--Nothing in this section may be construed 
to alter, affect, or annul the applicability of any other Federal law.

SEC. 8. SECURED LOANS AND LOAN GUARANTEES.

    (a) Authority.--The Secretary may enter into agreements with 
eligible entities to make, and may make, secured loans to such entities 
as provided under this section for eligible projects selected under 
section 8.
    (b) Use.--
            (1) In general.--The proceeds of a secured loan under this 
        section shall be used only--
                    (A) to finance project costs of an eligible project 
                selected under section 8;
                    (B) subject to paragraph (2), to refinance interim 
                construction financing of eligible project costs of an 
                eligible project selected under section 8; or
                    (C) to refinance long-term project obligations or 
                Federal credit instruments, if such refinancing 
                provides additional funding capacity for the 
                completion, enhancement, or expansion of a project 
                that--
                            (i) is selected under section 8; or
                            (ii) was originally financed, in whole or 
                        in part, with amounts provided other than under 
                        this Act, if the project otherwise meets the 
                        requirements of section 8.
            (2) Limitation on refinancing of interim construction 
        financing.--The proceeds of a secured loan under this section 
        made for an eligible project may not be used for the purpose 
        under paragraph (1)(B) after the expiration of the 12-month 
        period beginning on the date of substantial completion of the 
        project.
    (c) Risk Assessment.--Before entering into an agreement under this 
subsection for a secured loan, the Secretary, in consultation with the 
Director of the Office of Management and Budget and each rating agency 
providing a preliminary rating opinion letter under section 8(c)(1)(B), 
shall determine an appropriate capital reserve subsidy amount for the 
secured loan, taking into account each such preliminary rating opinion 
letter.
    (d) Investment-Grade Rating Requirement for Senior Obligations.--
The execution of a secured loan under this section shall be contingent 
on receipt by the senior obligations of the project of an investment-
grade rating.
    (e) Terms and Limitations.--
            (1) Maximum amount.--The amount of a secured loan under 
        this section shall not exceed the lesser of--
                    (A) an amount equal to 49 percent of the reasonably 
                anticipated eligible project costs; or
                    (B) if the secured loan does not receive an 
                investment-grade rating, the amount of the senior 
                project obligations of the project.
            (2) Payment.--A secured loan under this section--
                    (A) shall be payable, in whole or in part, from 
                State or local taxes, user fees, or other dedicated 
                revenue sources that also secure the senior project 
                obligations of the relevant project;
                    (B) shall include a rate covenant, coverage 
                requirement, or similar security feature supporting the 
                project obligations; and
                    (C) may have a lien on revenues described in 
                subparagraph (A), subject to any lien securing project 
                obligations.
            (3) Interest rate.--The interest rate on a secured loan 
        under this section shall be--
                    (A) equal to the yield on marketable United States 
                Treasury securities of a similar maturity to the 
                maturity of the secured loan on the date of execution 
                of the loan agreement; and
                    (B) fixed for the term of the loan.
            (4) Maturity date.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the final maturity date of a secured loan under 
                this section for an eligible project shall be not later 
                than 35 years after the date of substantial completion 
                of the project.
                    (B) Special rule for state infrastructure financing 
                authorities.--The final maturity date of a secured loan 
                under this section made to a State infrastructure 
                financing authority shall be not later than 35 years 
                after the date on which loan amounts are first 
                disbursed.
            (5) Nonsubordination.--A secured loan under this section 
        shall not be subordinated to the claims of any holder of 
        project obligations in the event of bankruptcy, insolvency, or 
        liquidation of the obligor.
            (6) Fees.--The Secretary may establish fees in connection 
        with a secured loan under this section, in amounts sufficient 
        to cover all or a portion of the costs to the Federal 
        Government of secured loans under this section.
            (7) Use of proceeds for payment of non-federal share.--The 
        proceeds of a secured loan under this section may be used to 
        pay any non-Federal share required with respect to other 
        funding obtained for project costs, but only if such secured 
        loan is repaid using non-Federal funds.
            (8) Maximum federal involvement.--For any project for which 
        assistance is provided under this Act, the total amount of 
        Federal assistance from all sources, including this Act, shall 
        not exceed 80 percent of the total project cost.
            (9) Other terms and conditions.--A secured loan provided 
        for a project under this section shall be subject to such other 
        terms and conditions, and contain such covenants, 
        representations, warranties, and requirements (including 
        requirements for audits), as the Secretary determines to be 
        appropriate.
    (f) Repayment.--
            (1) Schedule.--The Secretary shall establish a repayment 
        schedule for each secured loan provided under this section, 
        based on the projected cash flow from project revenues and 
        other repayment sources.
            (2) Commencement.--
                    (A) In general.--Except as provided in subparagraph 
                (B), scheduled loan repayments of principal or interest 
                on a secured loan under this section for an eligible 
                project shall commence not later than 5 years after the 
                date of substantial completion of the project.
                    (B) Special rule for state infrastructure financing 
                authorities.--Scheduled loan repayments of principal or 
                interest on a secured loan made under this section to a 
                State infrastructure financing authority shall commence 
                not later than 5 years after the date on which amounts 
                are first disbursed.
            (3) Deferred payments.--
                    (A) In general.--If, at any time after the date of 
                substantial completion of a project for which a secured 
                loan is provided under this section, the project is 
                unable to generate sufficient revenues to pay the 
                scheduled loan repayments of principal and interest on 
                the loan, the Secretary may, subject to subparagraph 
                (C), allow the obligor to add unpaid principal and 
                interest to the outstanding balance of the secured 
                loan.
                    (B) Interest.--Any payment deferred pursuant to 
                subparagraph (A) shall--
                            (i) continue to accrue interest in 
                        accordance with subsection (e)(3) until fully 
                        repaid; and
                            (ii) be amortized over the remaining term 
                        of the secured loan.
                    (C) Criteria.--Any payment deferral pursuant to 
                subparagraph (A) shall be contingent on the project 
                meeting--
                            (i) standards for reasonable assurance of 
                        repayment, as the Secretary shall establish; 
                        and
                            (ii) such other criteria as the Secretary 
                        may establish.
            (4) Prepayment.--
                    (A) Use of excess revenues.--Any excess revenues 
                from an eligible project that remain after satisfying 
                scheduled debt service requirements on the project 
                obligations and secured loan and all deposit 
                requirements under the terms of any trust agreement, 
                bond resolution, or similar agreement securing project 
                obligations may be applied annually to prepay a secured 
                loan under this section without penalty.
                    (B) Use of proceeds of refinancing.--A secured loan 
                under this section may be prepaid at any time, without 
                penalty, from the proceeds of refinancing from non-
                Federal funding sources.
    (g) Sale of Secured Loans.--
            (1) In general.--Subject to paragraph (2), if the Secretary 
        determines that the sale or reoffering of a secured loan under 
        this section for an eligible project can be made on favorable 
        terms, the Secretary may sell the loan to another entity or 
        reoffer the loan into the capital markets as soon as 
        practicable after the date of substantial completion of a 
        project and after providing notice to the obligor.
            (2) Consent of obligor.--In making a sale or reoffering 
        under paragraph (1), the Secretary may not change the original 
        terms and conditions of the secured loan without the written 
        consent of the obligor.
    (h) Loan Guarantees.--
            (1) In general.--In lieu of making a secured loan under 
        this section for an eligible project, the Secretary may provide 
        a loan guarantee for a project obligation for a project funded 
        by a qualified lender (as such term is defined in section 12), 
        but only if the Secretary determines that the cost as such term 
        is defined in section 502 of the Federal Credit Reform Act of 
        1990 (2 U.S.C. 661a) of the loan guarantee is substantially the 
        same as or less than that of making a secured loan.
            (2) Terms.--The terms of a loan guarantee provided under 
        this subsection shall be consistent with the terms established 
        in this section for a secured loan, except that the interest 
        rate on the guaranteed loan and any prepayment features shall 
        be negotiated between the obligor and the qualified lender, 
        subject to the consent of the Secretary.

SEC. 9. PROGRAM ADMINISTRATION.

    (a) Requirement.--The Secretary shall establish a uniform system to 
service the Federal credit instruments made available under this Act.
    (b) Servicer.--
            (1) In general.--The Secretary may appoint a financial 
        entity to assist the Secretary in servicing Federal credit 
        instruments provided under this Act.
            (2) Duties.--A servicer appointed under paragraph (1) shall 
        act as the agent for the Secretary.
    (c) Assistance From Experts.--The Secretary may retain the 
services, including counsel, of organizations and entities with 
expertise in the field of municipal and project finance to assist in 
the underwriting and servicing of Federal credit instruments provided 
under this Act.

SEC. 10. STATE AND LOCAL PERMITS.

    The provision of financial assistance under this Act for an 
eligible project shall not--
            (1) relieve any recipient of such assistance of any 
        obligation to obtain any required State or local permit or 
        approval with respect to the project;
            (2) limit the right of any unit of State or local 
        government to approve or regulate any rate of return on private 
        equity invested in the project; or
            (3) otherwise supersede any State or local law or 
        regulation applicable to the construction or operation of the 
        project.

SEC. 11. DEFINITIONS.

    In this Act, the following definitions shall apply:
            (1) Eligible entity.--The term ``eligible entity'' means an 
        entity listed in section 5 to receive financial assistance 
        under this Act.
            (2) Eligible project.--The term ``eligible project'' means 
        a project described in section 6.
            (3) Eligible project costs.--The term ``eligible project 
        costs'' means, with respect to an eligible project, any costs 
        of the project eligible under section 8 to be paid with amounts 
        from a loan made or guaranteed under this Act.
            (4) Federal credit instrument.--The term ``Federal credit 
        instrument'' means a secured loan made, or loan guarantee 
        provided, under section 9.
            (5) Investment-grade rating.--The term ``investment-grade 
        rating'' means, with respect to project obligations, a rating 
        of BBB minus, Baa3, bbb minus, BBB (low), or higher as assigned 
        by a rating agency.
            (6) Loan guarantee.--The term ``loan guarantee'' means any 
        guarantee or other pledge by the Secretary to pay all or part 
        of the principal of, and interest on, a loan or other debt 
        obligation.
            (7) Obligor.--The term ``obligor'' means--
                    (A) with respect to a Federal credit instrument 
                that is a secured loan under section 9, the eligible 
                entity that is primarily liable for payment of the 
                principal of, or interest on, the loan; and
                    (B) with respect to a Federal credit instrument 
                that is a loan guarantee under section 9(h), the 
                eligible entity that is primarily liable for payment of 
                the loan or other debt obligation repayment of which is 
                guaranteed pursuant to such section.
            (8) Project obligation.--The term ``project obligation'' 
        means, with respect to an eligible project, any note, bond, 
        debenture, or other debt obligation issued by an obligor in 
        connection with the financing of the project. Such term does 
        not include a Federal credit instrument.
            (9) Qualified lender.--
                    (A) In general.--The term ``qualified lender'' 
                means any non-Federal qualified institutional buyer, as 
                such term is defined in section 230.144A(a) of title 
                17, Code of Federal Regulations (or any successor 
                regulation), known as Rule 144A(a) of the Securities 
                and Exchange Commission and issued under the Securities 
                Act of 1933 (15 U.S.C. 77a et seq.).
                    (B) Inclusions.--Such term includes--
                            (i) a qualified retirement plan (as defined 
                        in section 4974(c) of the Internal Revenue Code 
                        of 1986) that is a qualified institutional 
                        buyer; and
                            (ii) a governmental plan (as defined in 
                        section 414(d) of the Internal Revenue Code of 
                        1986) that is a qualified institutional buyer.
            (10) Rating agency.--The term ``rating agency'' means a 
        credit rating agency registered with the Securities and 
        Exchange Commission as a nationally recognized statistical 
        rating organization (as defined in section 3(a) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a))).
            (11) Secretary.--The term ``Secretary'' means the Secretary 
        of Transportation.
            (12) Secured loan.--The term ``secured loan'' means a 
        direct loan or other debt obligation issued by an obligor and 
        funded by the Secretary pursuant to section 9.
            (13) State.--The term ``State'' means a State, the District 
        of Columbia, the Commonwealth of Puerto Rico, and any other 
        territory or possession of the United States.
            (14) State infrastructure financing authority.--The term 
        ``State infrastructure financing authority'' means the State 
        entity established or designated by the Governor of a State to 
        receive assistance under this Act.
            (15) Subsidy amount.--The term ``subsidy amount'' means, 
        with respect to a Federal credit instrument, the amount of 
        budget authority sufficient to cover the estimated long-term 
        cost to the Federal Government of the Federal credit 
        instrument, as calculated on a net present value basis, 
        excluding administrative costs and any incidental effects on 
        governmental receipts or outlays in accordance with the Federal 
        Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).
            (16) Substantial completion.--The term ``substantial 
        completion'' means, with respect to a project, the earliest 
        date on which a project is considered capable of performing the 
        functions for which the project is designed.

SEC. 12. REGULATIONS.

    The Secretary may issue such regulations as the Secretary considers 
appropriate to carry out this Act.

SEC. 13. FUNDING.

    Section 608(a) of title 23, United States Code, is amended--
            (1) by redesignating paragraphs (4) through (6) as 
        paragraphs (5) through (7), respectively; and
            (2) by inserting after paragraph (3) the following:
            ``(4) Set asides.--Of the total amount of funds made 
        available to carry out this chapter for each fiscal year--
                    ``(A) $11,000,000 shall be set aside for pedestrian 
                and bicycle infrastructure projects described in the 
                New Opportunities for Bicycle and Pedestrian 
                Infrastructure Financing Act of 2013 unless and until 
                the pilot program established by that Act is 
                terminated; and
                    ``(B) $1,000,000 for shall be set aside for 
                administrative costs of the program.''.

SEC. 14. REPORT TO CONGRESS.

    Not later than 2 years after the date of enactment of this Act, the 
Secretary shall submit to Congress a report summarizing the financial 
performance of the projects that are receiving, or have received, 
assistance under this Act, including a recommendation as to whether the 
objectives of this Act are best served--
            (1) by continuing the program under the authority of the 
        Secretary; and
            (2) by phasing out the program and relying on the capital 
        markets to fund the types of infrastructure investments 
        assisted by this Act without Federal participation.
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