I 

110TH CONGRESS 

1ST SESSION H. R. 1075 

To establish the United States Territories Infrastructure Bond Bank, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 15, 2007 

Ms. BORDALLO (for herself and Mrs. CHRISTENSEN) introduced the following 

bill; which was referred to the Committee on Natural Resources, and in 

addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such 

provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To establish the United States Territories Infrastructure 

Bond Bank, and for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘United States Terri5 tories Infrastructure Bond Bank Authorization Act’’. 

6 SEC. 2. DEFINITIONS. 

7 In this Act: 

8 (1) BANK.—The term ‘‘Bank’’ means the 

9 United States Territories Infrastructure Bond Bank. 


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1 (2) BOARD.—The term ‘‘Board’’ means the 

2 Board of Directors of the United States Territories 

3 Infrastructure Bond Bank. 

4 (3) DEBT INSTRUMENTS.—The term ‘‘debt in5 struments’’ means bonds or notes issued by the 

6 Bank under authority granted in this Act. 

7 (4) INFRASTRUCTURE.—The term ‘‘infrastruc8 ture’’ means those facilities that are essential for 

9 public health, welfare, and safety, such as sewage 

10 treatment facilities, municipal water supply and 

11 treatment facilities, solid waste facilities, public safe12 ty equipment and facilities, roads, traffic control de13 vices and other transportation facilities, sidewalks, 

14 buried utility lines and other streetscape improve15 ments, parks and other open space or recreational 

16 areas. 

17 (5) TERRITORIAL CUSTOMER.—The term ‘‘ter18 ritorial customer’’ means any of the governments of 

19 the United States territories of American Samoa, 

20 Guam, the United States Virgin Islands, or the 

21 Commonwealth of the Northern Mariana Islands, or 

22 such other territory as shall become eligible in ac23 cordance with the provisions of section 14. 

24 (6) TERRITORY.—The term ‘‘territory’’ means 

25 a territory of the United States. 


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1 (7) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of the Interior. 

3 SEC. 3. ESTABLISHMENT. 

4 (a) IN GENERAL.—The Secretary shall establish, in 

5 accordance with this Act, a body corporate and politic, 

6 with corporate succession, to be known as the ‘‘United 

7 States Territories Infrastructure Bond Bank’’. The Bank 

8 shall not be an agency or instrumentality of the Federal 

9 Government, and an officer, employee, or member of the 

10 board of the Bank shall not be deemed to be an officer 

11 or employee of or agent for the Federal Government by 

12 reason of such service. 

13 (b) PURPOSE.—The purpose of the Bank shall be to 

14 provide low-cost financing for any territorial customer to 

15 construct infrastructure or refinance debt that was ac16 quired to construct infrastructure. 

17 (c) ESSENTIAL GOVERNMENTAL FUNCTION.—The 

18 Bank shall be an entity exercising public and essential 

19 governmental functions, and the exercise by the Bank of 

20 the powers conferred by this Act is deemed to be an essen21 tial governmental function of the territories. 

22 (d) INCORPORATION OF BANK.—The Secretary 

23 shall— 

24 (1) incorporate the Bank in a jurisdiction of the 

25 United States, under the laws of that jurisdiction, 


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1 after consultation with the governors of the terri2 tories; and 

3 (2) organize the initial meeting of the Board of 

4 Directors. 

5 SEC. 4. BOARD OF DIRECTORS. 

6 (a) IN GENERAL.—Except as provided in section 14, 

7 the Bank shall be governed by a Board of Directors con8 sisting of 5 members as follows: one appointed by the Sec9 retary, and one each appointed by the governors of Amer10 ican Samoa, Guam, the United States Virgin Islands, and 

11 the Commonwealth of the Northern Mariana Islands. 

12 (b) RESIDENCY.—A director from a territory shall be 

13 a resident of the territory from which the director was ap14 pointed. 

15 (c) TERM OF OFFICE; VACANCY; REMOVAL.—Direc16 tors shall serve for a term of 4 years, except that the terms 

17 of the members of the initial board shall terminate in a 

18 uniformly staggered fashion over the first 4 years of the 

19 Bank’s existence as determined by the Secretary. A direc20 tor may be reappointed. Any vacancy occurring other than 

21 by the expiration of a term shall be filled by appointment 

22 for the unexpired term. The Secretary may remove a direc23 tor from office for cause after a public hearing. The Sec24 retary may suspend a director pending the completion of 

25 this hearing. 


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1 (d) ELECTION OF CHAIRMAN.—The Board shall elect 

2 a chairman by a simple majority from among the Board’s 

3 members. 

4 (e) OATH OF OFFICE.—Each director shall— 

5 (1) take and subscribe an oath, upon entering 

6 office, to perform the duties of his office faithfully, 

7 impartially and justly to the best of his ability, with 

8 a record of the oath to be filed with the records of 

9 the Bank; 

10 (2) submit a report of the director’s personal 

11 investment holdings and if the Secretary determines 

12 that such holdings conflict with the purposes of this 

13 Act, the director must divest himself of such hold14 ings, or vacate the position; and 

15 (3) execute a surety bond as required in section 

16 12. 

17 (f) COMPENSATION.—All directors shall be reim18 bursed for reasonable expenses incurred in carrying out 

19 their duties under this Act. 

20 SEC. 5. PROFESSIONAL STAFF. 

21 (a) APPOINTMENT OF PRESIDENT BY BOARD.—The 

22 Board shall appoint a President who shall serve at the 

23 pleasure of the Board, and, subject to the authority of the 

24 Board, shall exercise general supervision, direction, and 

25 control of the affairs of the Bank. The Board of Directors 


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1 shall determine the duties and compensation of the Presi2 dent. 

3 (b) EMPLOYEES.—The President may employ a gen4 eral counsel, architects, engineers, accountants, attorneys, 

5 financial advisors or experts and any other agents or em6 ployees who are required and determine their qualifica7 tions, terms of office, duties and compensation. 

8 SEC. 6. BANK AUTHORITY AND PROHIBITIONS. 

9 (a) AUTHORITY TO ISSUE GENERAL OBLIGATIONS, 

10 BONDS, OR NOTES.—The Bank may issue general obliga11 tions, bonds, or notes in such principal amounts as the 

12 Board deems necessary to provide funds for any purpose 

13 authorized in this Act, including— 

14 (1) making loans; 

15 (2) paying, funding, or refunding of the prin16 cipal of, or interest or redemption premiums on, any 

17 bonds or notes issued by it whether the bonds or 

18 notes or interest to be funded or refunded have or 

19 have not become due; 

20 (3) establishing or increasing of reserves to se21 cure or to pay bonds or notes or interest thereon, 

22 and 

23 (4) paying all other costs or expenses of the 

24 Bank, during the initial 2 years of operation, that 


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1 are incident to carrying out the Bank’s purposes and 

2 powers. 

3 (b) GENERAL POWERS.—The Bank may exercise the 

4 general powers of a bond bank, such as the power to— 

5 (1) sue and be sued; 

6 (2) adopt an official seal and alter the seal at 

7 pleasure; 

8 (3) adopt bylaws and make and enforce rules 

9 for the conduct of its business and for use of its 

10 services and facilities; 

11 (4) maintain an office at any place within the 

12 United States; 

13 (5) acquire, hold, use and dispose of its income, 

14 revenues, funds and moneys; 

15 (6) acquire, rent, lease, hold, use and dispose of 

16 other personal property for its purposes; 

17 (7) borrow money and issue its negotiable gen18 eral obligation debt instruments payable from reve19 nues or funds of the Bank, subject only to agree20 ments with the holders of particular bonds or notes 

21 pledging particular revenues or funds, and to provide 

22 for and secure the payment thereof and to provide 

23 for the rights of the holders thereof, and to pur24 chase, hold and dispose of any of its debt instru25 ments; Except as otherwise provided herein or by 


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1 the Bank, every issue of bonds or notes shall be gen2 eral obligations; 

3 (8) obtain additional security for bonds or notes 

4 by a pledge of any grant or contributions from the 

5 United States, a State or territory, or any other gov6 ernmental unit, or any person, firm or corporation, 

7 or a pledge of any income or revenues, funds or 

8 moneys of the Bank from any source whatsoever; 

9 (9) fix and revise from time to time and charge 

10 and collect fees and charges for the use of its serv11 ices or facilities; 

12 (10) accept gifts or grants of property, funds, 

13 money, materials, labor, supplies or services from 

14 the United States of America or from any govern15 mental unit or any person, firm or corporation, and 

16 carry out the terms or provisions or make agree17 ments with respect to any gifts or grants, and to do 

18 any and all things necessary and appropriate in con19 nection with procuring, acceptance or disposition of 

20 gifts or grants; 

21 (11) do anything authorized by this Act, 

22 through its officers, agents or employees or by con23 tracts with any person, firm or corporation; 

24 (12) enter into and enforce all contracts nec25 essary and appropriate for the purposes of the Bank 


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1 or pertaining to any loan to a governmental unit or 

2 any purchase or sale of municipal bonds or revenue 

3 bonds or other investments or to the performance of 

4 its duties and execution or carrying out of any of its 

5 powers under this Act; 

6 (13) purchase or hold municipal bonds and rev7 enue bonds at such prices and in such manner as 

8 the Bank deems advisable, and sell municipal bonds 

9 and revenue bonds acquired or held by it at such 

10 prices without relation to cost and in such manner 

11 as the Bank deems advisable; 

12 (14) invest any funds or moneys of the Bank 

13 not immediately required for loan to governmental 

14 units and for the purchase of municipal bonds or 

15 revenue bonds, in the same manner as permitted for 

16 investment of funds belonging to the territories or 

17 held in the treasury, except as otherwise provided by 

18 this Act; 

19 (15) prescribe any form of application or proce20 dure required of a governmental unit for the loan or 

21 purchase of its municipal bonds or revenue bonds, 

22 fix the terms and conditions of that loan or pur23 chase, and enter into agreements with governmental 

24 units with respect to any loan or purchase; 


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1 (16) consider the need, desirability or eligibility 

2 of the loan to a territorial customer, the ability of 

3 the territorial customer to secure borrowed money 

4 from other sources and the costs thereof, and the 

5 particular public improvement or purpose to be fi6 nanced by the municipal bonds or revenue bonds to 

7 be purchased by the Bank; 

8 (17) charge for its costs and services in review 

9 or consideration of any proposed loan to a territorial 

10 customer or purchase of municipal bonds or revenue 

11 bonds of a territorial customer, including a charge 

12 for such costs or services, whether or not the loan 

13 is made or the municipal bonds or revenue bonds are 

14 purchased; 

15 (18) establish any terms and provisions with re16 spect to any purchase of municipal bonds or revenue 

17 bonds by the Bank, including date and maturities of 

18 the bonds, provisions as to redemption or payment 

19 prior to maturity, and any other matters which are 

20 necessary or advisable in the judgment of the Bank; 

21 (19) conduct examinations and hearings and to 

22 hear testimony and take proof, under oath or affir23 mation, at public or private hearings, on any matter 

24 material for its information and necessary to carry 

25 out this Act; 


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1 (20) issue subpoenas requiring the attendance 

2 of witnesses and the production of books and papers 

3 pertinent to any hearing before the Bank, or before 

4 one or more of the directors of the Bank appointed 

5 by it to conduct the hearing; 

6 (21) apply to any court, having territorial juris7 diction of the offense, to have punished for contempt 

8 any witness who refuses to obey a subpoena, or who 

9 refuses to be sworn or affirmed to testify, or who is 

10 guilty of any contempt after summons to appear; 

11 (22) procure insurance against any losses in 

12 connection with its property, operations or assets in 

13 such amounts and from such insurers as it deems 

14 desirable; 

15 (23) consent, to the extent permitted under its 

16 contracts with the holders of bonds or notes of the 

17 Bank, to any modification of the rate of interest, 

18 time and payment of any installment of principal or 

19 interest, security or any other term of bond or note, 

20 contract or agreement of any kind to which the 

21 Bank is a party; and 

22 (24) issue Bank bonds or notes which are se23 cured by neither the reserve fund nor the revenue 

24 bond reserve fund, but which may be secured by 


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1 such other funds and accounts as may be authorized 

2 by the Bank from time-to-time. 

3 (c) PROHIBITIONS.—The Bank may not— 

4 (1) make loans of money to any person, firm or 

5 corporation other than a government or a govern6 mental agency or subdivision, or purchase securities 

7 issued by any person, firm or corporation other than 

8 a governmental unit or for investment except as pro9 vided in this Act; 

10 (2) issue bills of credit, or accept deposits of 

11 money for time or demand deposit, or administer 

12 trust, or engage in any form or manner in, or in the 

13 conduct of, any private or commercial banking busi14 ness, or act as a savings bank or savings and loan 

15 association; 

16 (3) be or constitute a bank or trust company 

17 within the jurisdiction or under the control of the 

18 comptroller of the currency of the United States of 

19 America or the department of the treasury thereof; 

20 or 

21 (4) be or constitute a bank, banker or dealer in 

22 securities within the meaning of or subject to the 

23 provisions of any securities, securities exchange, or 

24 securities dealers law, of the United States of Amer25 ica or of the territories or of any State. 


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1 SEC. 7. BYLAWS. 

2 The Board shall adopt, consistent with this Act and 

3 with concurrence from the Secretary, an appropriate by4 laws, charter or operating model that shall describe— 

5 (1) the operational structure of the Bank, in6 cluding the banks powers and limitation; 

7 (2) a description of the Bank’s fund and ac8 count structure; 

9 (3) procedures for payments and defaults; and 

10 (4) minimum borrower requirements. 

11 SEC. 8. SECURITY. 

12 (a) AID INTERCEPTION.—An interception of any 

13 Federal aid intended for a United States territory that 

14 has defaulted on an obligation to the Bank may be imple15 mented, subject to the following conditions— 

16 (1) the Federal aid to be intercepted was ex17 plicit in the debt instrument signed by the territorial 

18 customer and the Bank; 

19 (2) the member or members of the Board ap20 pointed by the Secretary agreed to the specific des21 ignation in the debt instrument of sources of Fed22 eral aid that would be intercepted; 

23 (3) the Bank provides the Secretary with writ24 ten certification of the default and a request to 

25 intercept the Federal Aid, and sends notice of the 

26 certification to the territorial customer; and 


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1 (4) the Bank provides notice to the Federal de2 partments or agencies administering those funds 

3 payable to the territorial customer that were explicit 

4 in the debt instrument. 

5 (b) DIRECTED PAYMENT.—Following receipt of the 

6 written certification from the Bank provided for in sub7 section (a), the Secretary shall notify the Secretary of the 

8 Treasury of the default and the Federal aid to be inter9 cepted. The Secretary of the Treasury shall pay the Fed10 eral aid funds that are intercepted to the Bank on the 

11 account of the territorial customer to defray principal and 

12 interest owed according the debt instrument. 

13 SEC. 9. REPORTS. 

14 The Bank shall prepare and submit to each official 

15 who has appointed a member of the Board a report on 

16 activities of the Bank for the preceding calendar year, and 

17 an audit of its books and accounts by in independent cer18 tified public accountant, within 90 days of the end of the 

19 calendar year. The report and audit shall be made avail20 able by request to the public. 

21 SEC. 10. UNITED STATES AND TERRITORIAL GOVERN22 MENTS NOT OBLIGATED. 

23 (a) UNITED STATES NOT OBLIGATED.—The deposit 

24 of Federal funds into the Bank established under this Act 

25 shall not be construed as a commitment, guarantee, or obVerDate Aug 31 2005 20:37 Feb 28, 2007 Jkt 059200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H1075.IH H1075

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1 ligation on the part of the United States to any third 

2 party, nor shall any third party have any right against 

3 the United States for payment solely by virtue of the con4 tribution. Any security or debt-financing instrument 

5 issued by the infrastructure bank shall expressly state that 

6 the security or instrument does not constitute a commit7 ment, guarantee, or obligation of the United States. 

8 (b) OBLIGATIONS OF TERRITORIAL GOVERN9 MENTS.—A territorial customer is liable only for its obli10 gations to the Bank, and not for the obligations and ac11 tions of the Bank. 

12 SEC. 11. LOCAL AUTHORITY. 

13 Prior to a territory receiving financial assistance from 

14 the Bank, the Governor of the territory must sign or con15 cur in a certification that the territory has appropriate 

16 legal authority to avail itself of the financial assistance 

17 offered by the Bank. 

18 SEC. 12. ADMINISTRATION. 

19 (a) EXPENSES.—All expenses incurred by the Bank 

20 in carrying out the purposes of this Act shall be payable 

21 solely from revenues or fees collected by the Bank, except 

22 as provided in section 6(a) of this Act. 

23 (b) SURETY BONDS.—The following surety bonds to 

24 be paid by the Bank shall be required of the officials of 

25 the Bank— 


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1 (1) $50,000 for the Chairman of the Board; 

2 (2) $50,000 for the President of the Bank; and 

3 (3) $25,000 for a member of the Board. 

4 SEC. 13. TAX EXEMPTION. 

5 All activities, instruments, property, and income of 

6 the Bank shall be exempt from all manner of Federal, 

7 State, and local taxation. 

8 SEC. 14. ADDITIONAL PARTICIPATION. 

9 (a) EXTENDED ELIGIBILITY.—After the initial 5 

10 years of the Bank’s existence, the Secretary, with the con11 currence of each of the Governors of the American Samoa, 

12 Guam, the United States Virgin Islands, and the Com13 monwealth of the Northern Mariana Islands, may invite 

14 the governor of another United States territory to appoint 

15 a member of the Board and, at such time as the new mem16 ber has been appointed, extend eligibility to that territory 

17 for Bank services. 

18 (b) VOTING MEMBERS.—If the number of voting 

19 members on the Board is an even number, the Secretary 

20 shall appoint another member. 

Æ 


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