I

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105TH CONGRESS

1ST SESSION H. R. 712

To facilitate efficient investments and financing of infrastructure projects

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

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 12, 1997

Ms. DELAURO (for herself, Mr. GEPHARDT, Mr. BONIOR, Mr. FAZIO of California, Ms. PELOSI, and Mr. BORSKI) introduced the following bill; which

was referred to the Committee on Transportation and Infrastructure, and

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

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

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

the jurisdiction of the committee concerned

A BILL

To facilitate efficient investments and financing of infrastructure projects and new job creation through the establishment of a National Infrastructure Development Corporation, and for other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘National Infrastruc5 ture Development Act of 1997’’.
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1 SEC. 2. FINDINGS.

2 The Congress hereby finds the following:

3 (1) As expressed in Executive Order No. 12893

4 of January 26, 1994, which sets out guiding prin5 ciples for Federal infrastructure investments, a well

6 functioning infrastructure is vital to sustained eco7 nomic growth, to the quality of life of our commu8 nities, and to the protection of our environment and

9 natural resources.

10 (2) Although grant programs of the Federal

11 Government must continue to play a central role in

12 financing the infrastructure needs of the Nation,

13 current and foreseeable demands on existing Fed14 eral, State, and local funding for infrastructure ex15 pansion and replacement exceed the resources to

16 support these programs by margins wide enough to

17 prompt serious concerns about the Nation’s ability

18 to sustain long-term economic development, produc19 tivity, and international competitiveness.

20 (3) Increased investments by public and private

21 capital in infrastructure facilities the financing for

22 which can be based on the revenue generated by

23 such facilities and by other dedicated revenue

24 sources would assist the Nation in marshalling the

25 resources necessary to meet existing and projected

26 infrastructure funding demands.
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1 (4) The private capital markets, including the

2 more than $4,500,000,000,000 dollars in capital

3 held by institutional investors such as pension funds,

4 have a growing interest in public-private infrastruc5 ture investment opportunities that can produce com6 petitive risk-adjusted rates of return.

7 (5) Federal leadership is necessary to expedi8 tiously develop these new infrastructure investment

9 mechanisms.

10 (6) Such leadership can best be accomplished

11 by the establishment of a self-supporting national

12 entity designed to lead the way in promoting appro13 priate public-private infrastructure partnerships and

14 by the creation of a public benefit bond designed to

15 facilitate investment by pension plans in infrastruc16 ture development.

17 (7) Such a national entity will provide for sig18 nificant and sustained job growth in critical sectors

19 of the Nation’s economy as it helps address unmet

20 infrastructure needs by leveraging limited Federal

21 resources with private capital.

22 SEC. 3. PURPOSES.

23 The purposes of this Act are as follows:

24 (1) To establish the National Infrastructure

25 Development Corporation for the purpose of making
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1 new sources of financing available for the develop2 ment of infrastructure facilities, and to facilitate the

3 use and issuance of public benefit bonds.

4 (2) To establish a subsidiary of the Corpora5 tion, the National Infrastructure Insurance Corpora6 tion, to issue insurance, reinsurance and related un7 dertakings in respect of the issuance of obligations

8 related to the development of infrastructure facili9 ties.

10 (3) To establish a category of financial instru11 ment to be known as ‘‘public benefit bonds’’ de12 signed to help facilitate pension plan investment in

13 the development of infrastructure facilities.

14 SEC. 4. DEFINITIONS.

15 The following definitions shall apply for purposes of

16 this Act unless the context requires otherwise:

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

18 means the National Infrastructure Development

19 Corporation established under section 5(a).

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

21 and ‘‘develop’’ mean, with respect to an infrastruc22 ture facility, any—

23 (A) preconstruction planning, feasibility re24 view, permitting and design work and other

25 preconstruction activities;
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1 (B) construction, reconstruction, rehabili2 tation, replacement, or expansion; and

3 (C) operation and maintenance.

4 (3) ENTITY.—The term ‘‘entity’’ means an in5 dividual, corporation, partnership, joint venture,

6 trust or governmental entity or instrumentality.

7 (4) INFRASTRUCTURE FACILITY.—The term

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

9 bridge, tunnel, airport, mass transportation vehicle

10 or system, passenger rail vehicle or system, inter11 modal transportation facility, waterway, commercial

12 port, drinking or waste water treatment facility,

13 solid waste disposal facility, pollution control system,

14 hazardous waste facility, federally designated na15 tional information highway facility, school, and any

16 ancillary facility which forms a part of any such fa17 cility or is reasonably related to such facility, wheth18 er owned, leased or operated by a public entity or a

19 private entity or by a combination of such entities,

20 and the financing or refinancing of the development

21 of which is, or will be, supported in whole or in part

22 by user fees or other dedicated revenue sources.
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1 (5) INSURANCE CORPORATION.—The term ‘‘In2 surance Corporation’’ means the National Infra3 structure Insurance Corporation established pursu4 ant to section 5(b).

5 (6) NIC.—The term ‘‘NIC’’ means the Cor6 poration and all subsidiaries of the Corporation.

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

8 means a pension plan as defined in section 3(2) of

9 the Employee Retirement Income Security Act of

10 1974, including any public pension plan.

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

12 benefit bond’’ means a bond or other indebtedness

13 meeting the requirements of section 72(w) of the In14 ternal Revenue Code of 1986.

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

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

17 (A) which is undertaking the development

18 of all or part of any infrastructure facility—

19 (i) pursuant to requirements estab20 lished in 1 or more contracts between such

21 entity and a State or an instrumentality of

22 a State; or

23 (ii) the activities of which with respect

24 to such facility are subject to regulation by
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1 a State or any instrumentality of a State;

2 and

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

4 own, lease, or operate, such infrastructure facil5 ity in whole or in part, and at least 1 of the

6 participants in such entity is a nongovern7 mental entity.

8 (10) REVOLVING FUND.—The term ‘‘revolving

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

10 State or a political subdivision or instrumentality of

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

12 loans, commitments, or other financial accommoda13 tion available for the development of 1 or more cat14 egories of infrastructure facilities.

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

16 means the Secretary of the Treasury or the designee

17 of the Secretary.

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

19 District of Columbia, Puerto Rico, Guam, American

20 Samoa, the Trust Territories of the Pacific Islands,

21 the Virgin Islands, the Northern Mariana Islands,

22 and any territory of the United States.

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

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

25 stock of the Corporation owned by the Secretary is
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1 fully repurchased or converted in accordance with

2 section 13 and the transition of the Corporation to

3 a government-sponsored enterprise in accordance

4 with such section is completed.

5 SEC. 5. ESTABLISHMENT OF NIC.

6 (a) ESTABLISHMENT OF NATIONAL INFRASTRUC7 TURE DEVELOPMENT CORPORATION.—The National In8 frastructure Development Corporation is hereby estab9 lished as a wholly owned Government corporation subject

10 to chapter 91 of title 31 (commonly referred to as the Gov11 ernment Corporation Control Act), except as otherwise

12 provided in this Act.

13 (b) ESTABLISHMENT OF NATIONAL INFRASTRUC14 TURE INSURANCE CORPORATION.—The National Infra15 structure Insurance Corporation is hereby established as

16 a subsidiary of the Corporation and as a wholly owned

17 Government corporation subject to chapter 91 of title 31,

18 except as otherwise provided in this Act.

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

20 and the Insurance Corporation shall each conduct their

21 respective businesses as self-supporting entities.

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

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

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

25 Corporation shall have the following powers:
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1 (1) To make senior and subordinated loans and

2 purchase senior and subordinated debt securities

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

4 and enter into a binding commitment to make any

5 such loan or purchase any such security, on such

6 terms as the Corporation may determine, in the Cor7 poration’s discretion, to be appropriate, the proceeds

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

9 development of 1 or more infrastructure facilities,

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

11 subsection (b), provide preconstruction phase assist12 ance in accordance with section 8(f).

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

14 and nonvoting equity securities of the Corporation

15 on such terms as the board of directors of the Cor16 poration may determine, subject to the provisions of

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

18 appropriate and to pay such dividends on any out19 standing stock as the board of directors shall deter20 mine from time to time.

21 (3) To make the determinations with respect to

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

23 the Internal Revenue Code of 1986.
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1 (4) To make agreements and contracts with any

2 entity in furtherance of the business of the Corpora3 tion.

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

5 property of any Federal agency or instrumentality,

6 with the approval of such agency or instrumentality

7 and on a reimbursable basis, in carrying out the

8 purposes of this Act.

9 (6) To acquire, lease, pledge, exchange, and dis10 pose of real and personal property and otherwise ex11 ercise all the usual incidents of ownership of prop12 erty to the extent the exercise of such powers are ap13 propriate to and consistent with the purposes of the

14 Corporation.

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

16 corporate capacity in any court of competent juris17 diction, except that no attachment, injunction, or

18 similar process, mesne or final, may be issued

19 against the property of the Corporation or against

20 the Corporation with respect to such property.

21 (8) To indemnify the directors and officers of

22 the Corporation for liabilities arising out of the ac23 tions of the directors and officers in such capacity,

24 in accordance with, and subject to the limitations

25 contained in, the bylaws of the Corporation.
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1 (9) To exercise all other lawful powers which

2 are necessary or appropriate to carry out, and are

3 consistent with, the purposes of the Corporation, in4 cluding the powers conferred upon a corporation by

5 the District of Columbia Business Corporation Act.

6 (b) LIMITATIONS ON THE CORPORATION.—

7 (1) ACTIONS CONSISTENT WITH SELF-SUPPORT8 ING ENTITY STATUS.—The Corporation shall con9 duct its business in a manner consistent with the re10 quirement of section 5(c).

11 (2) CONDITION ON DEBT ISSUANCE.—The Cor12 poration shall not issue any debt security under sub13 section (a)(2) unless, at the time of the issuance

14 thereof, such security is rated by a nationally recog15 nized statistical rating organization at 1 of the 3

16 highest ratings of such organization.

17 (3) LIMITATION AND CONDITION ON ISSUANCE

18 OF DEBT AND NONVOTING EQUITY SECURITIES.—

19 (A) IN GENERAL.—Before the transition

20 date, the Corporation shall not issue any debt

21 security or nonvoting equity security under sub22 section (a)(2) without the prior consent of the

23 Secretary.

24 (B) APPROVAL OF SECRETARY FOR DEBT

25 SECURITY AFTER TRANSITION DATE.—On and
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1 after the transition date, the Corporation shall

2 not issue any debt security under subsection

3 (a)(2) without the prior consent of the Sec4 retary.

5 (4) CONDITION ON VOTING EQUITY ISSU6 ANCE.—Before the transition date, the Corporation

7 shall not issue any voting security to any entity

8 other than the Secretary, and, on and after the tran9 sition date, the issuance of any such security shall

10 be subject to the provisions of section 13.

11 (5) SALE OF VOTING SECURITIES OF THE IN12 SURANCE CORPORATION.—Before the transition

13 date, voting securities of the Insurance Corporation

14 purchased by the Corporation may not be sold or

15 otherwise transferred by the Corporation.

16 (6) INVESTMENTS CONSISTENT WITH PURPOSES

17 OF CORPORATION.—In order to achieve the Corpora18 tion’s purpose of effectively leveraging limited Fed19 eral resources with other public and private sources

20 of capital, the Corporation shall seek to maintain a

21 significant proportion of the Corporation’s infra22 structure investments in—

23 (A) subordinated securities; and
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1 (B) securities issued with respect to infra2 structure facilities developed by public-private

3 partnerships.

4 (7) COORDINATION WITH STATE AND LOCAL

5 REGULATORY AUTHORITY.—The provision of finan6 cial assistance by the Corporation pursuant to this

7 Act shall not be construed as—

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

9 authority to approve or regulate rates of return

10 on private equity invested in a project; or

11 (B) otherwise superseding any State law or

12 regulation applicable to a project.

13 (8) LIMITATION ON PRECONSTRUCTION ASSIST14 ANCE.—The Corporation shall provide assistance in

15 connection with the development of any infrastruc16 ture facility during the facility’s preconstruction

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

18 SEC. 7. INSURANCE CORPORATION’S POWERS AND LIMITA19 TIONS.

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

21 purposes of the Insurance Corporation as set forth in this

22 Act, the Insurance Corporation shall have the following

23 powers:

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

25 notes, debt instruments, loans, and any interest in
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1 any such obligation or loan, the proceeds of which

2 are to be used to finance or refinance the develop3 ment of 1 or more infrastructure facilities.

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

5 property with respect to infrastructure facilities.

6 (3) To issue letters of credit and undertake

7 such obligations and commitments as the Insurance

8 Corporation deems necessary to carry out the pur9 poses described in paragraphs (1) and (2).

10 (4) To issue and sell voting and nonvoting eq11 uity securities on such terms as the board of direc12 tors of the Insurance Corporation may determine,

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

14 of subsection (b), to be appropriate and to pay divi15 dends on any outstanding stock as the board of di16 rectors of the Insurance Corporation shall determine

17 from time to time.

18 (5) To make agreements and contracts with any

19 entity in furtherance of the business of the Insur20 ance Corporation.

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

22 property of any Federal agency or instrumentality,

23 with the approval of such agency or instrumentality

24 and on a reimbursable basis, in carrying out the

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

6 Insurance Corporation.

7 (8) To sue and be sued in the Insurance Cor8 poration’s corporate capacity in any court of com9 petent jurisdiction, except that no attachment, in10 junction, or similar process, mesne or final, may be

11 issued against the property of the Insurance Cor12 poration or against the Insurance Corporation with

13 respect to such property.

14 (9) To indemnify the directors and officers of

15 the Insurance Corporation for liabilities arising out

16 of the actions of the directors and officers in such

17 capacity, in accordance with, and subject to the limi18 tations contained in, the bylaws of the Insurance

19 Corporation.

20 (10) To exercise all other lawful powers which

21 are necessary or appropriate to carry out, and are

22 consistent with, the purposes of the Insurance Cor23 poration, including the powers conferred upon a cor24 poration by the District of Columbia Business Cor25 poration Act.
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1 (b) LIMITATIONS ON THE INSURANCE CORPORA2 TION.—

3 (1) ACTIONS CONSISTENT WITH SELF-SUPPORT4 ING ENTITY STATUS.—The Insurance Corporation

5 shall conduct its business in a manner consistent

6 with the requirement of section 5(c).

7 (2) INSURANCE CORPORATION RATING RE8 QUIREMENT.—The Insurance Corporation shall not

9 issue any primary insurance or letter of credit with

10 respect to 1 or more infrastructure facilities unless,

11 at the time of such issuance, the Insurance Corpora12 tion’s claims-paying ability is then rated by a nation13 ally recognized statistical rating organization at the

14 highest rating of such organization.

15 (3) LIMITATION ON REINSURANCE.—The Insur16 ance Corporation may write reinsurance in respect

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

18 respect to 1 or more infrastructure facilities issued

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

20 insurer is rated, at the time of issuance of such rein21 surance, by a nationally recognized statistical rating

22 organization at the highest rating of such organiza23 tion.

24 (4) LIMITATION ON INSURANCE AND OTHER AC25 TIVITIES.—The Insurance Corporation may issue
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1 primary insurance or a letter of credit with respect

2 to 1 or more infrastructure facilities, except that not

3 less than 75 percent of the principal amount of all

4 obligations so insured or subject of a letter of credit

5 shall be obligations which are, or based on a pub6 lished or indicative rating would be, without such in7 surance or letter of credit, rated by a nationally rec8 ognized statistical rating organization in the fourth

9 or fifth rating categories of such organization (BBB

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

11 (5) PRIOR CONSENT OF SECRETARY.—Before

12 the transition date, the Insurance Corporation shall

13 not issue any nonvoting equity security under sub14 section (a)(4) without the prior consent of the Sec15 retary.

16 (6) CONDITION ON VOTING EQUITY ISSU17 ANCE.—Before the transition date, the Insurance

18 Corporation shall not issue any voting security to

19 any entity other than the Corporation.

20 (7) COORDINATION WITH STATE AND LOCAL

21 REGULATORY AUTHORITY.—The provision of finan22 cial assistance by the Insurance Corporation pursu23 ant to this Act shall not be construed as—
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1 (A) limiting the right of any State or local

2 authority to approve or regulate rates of return

3 on private equity invested in a project; or

4 (B) otherwise superseding any State law or

5 regulation applicable to a project.

6 SEC. 8. ELIGIBILITY CRITERIA FOR ASSISTANCE FROM THE

7 CORPORATION AND THE INSURANCE COR8 PORATION.

9 (a) GENERAL.—No financial assistance shall be avail10 able under this Act from the Corporation or the Insurance

11 Corporation unless the applicant for such assistance has

12 demonstrated to the satisfaction of the Corporation or the

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

14 project for which such assistance is being sought meets—

15 (1) the requirements of this Act; and

16 (2) any criteria established in accordance with

17 this Act by the board of directors of the Corporation

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

19 (b) ESTABLISHMENT OF PROJECT CRITERIA.—

20 (1) IN GENERAL.—Consistent with the require21 ments of subsections (c) and (d), the boards of di22 rectors of the Corporation and the Insurance Cor23 poration shall each establish—

24 (A) criteria for determining eligibility for

25 financial assistance under this Act;
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1 (B) disclosure and application procedures

2 to be followed by States, revolving funds, and

3 other entities to nominate projects for assist4 ance under this Act; and

5 (C) such other criteria as the board of di6 rectors of the Corporation or the Insurance

7 Corporation may consider to be appropriate for

8 purposes of carrying out this Act.

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

10 The criteria established pursuant to paragraph

11 (1)(A) shall provide for the consideration of the fol12 lowing factors in considering eligibility for financial

13 assistance under this Act:

14 (A) The extent to which provision of assist15 ance by the Corporation or the Insurance Cor16 poration will further the objectives for infra17 structure investments established in Executive

18 Order No. 12893 of January 26, 1994, includ19 ing the stated objective of providing opportuni20 ties for ‘‘innovative public-private initiatives’’.

21 (B) The means by which development of

22 the infrastructure facility under consideration is

23 being financed, including—
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1 (i) the terms and conditions and fi2 nancial structure of the proposed financ3 ing;

4 (ii) the financial assumptions and pro5 jections on which the project is based; and

6 (iii) based on consideration of clauses

7 (i) and (ii), whether the infrastructure fa8 cility will have the capacity to be self-sup9 porting.

10 (C) The likelihood that the provision of as11 sistance by the Corporation or the Insurance

12 Corporation will cause such development to pro13 ceed more promptly and with lower costs for fi14 nancing to the public and private entities en15 gaged in developing such infrastructure facility

16 than would be the case without such assistance.

17 (D) The extent to which the provision of

18 assistance by the Corporation or the Insurance

19 Corporation maximizes the level of private in20 vestment in such infrastructure facility.

21 (3) LIMITATION ON CONDITIONS.—The Cor22 poration and the Insurance Corporation shall not

23 condition the approval of financial assistance for the

24 development of any infrastructure facility on a re25 quirement that a pension plan of a State or political
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1 subdivision of a State make an investment in such

2 facility.

3 (c) SUBMISSION OF PROJECT PROPOSALS.—

4 (1) ACCEPTANCE OF PROPOSALS.—The Cor5 poration and the Insurance Corporation shall accept,

6 for consideration, project proposals relating to the

7 development of infrastructure facilities submitted by

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

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

10 subsection (b).

11 (2) LIST OF PROJECTS UNDER CONSIDERATION

12 FOR ASSISTANCE.—Project proposals accepted pur13 suant to paragraph (1) and approved in principle

14 shall be placed on a list of projects being considered

15 for financial assistance under this Act.

16 (3) ELIGIBILITY FOR PRECONSTRUCTION AS17 SISTANCE.—Projects on the list established pursuant

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

19 preconstruction assistance in accordance with sub20 section (f).

21 (4) SUBSEQUENT APPROVALS.—Notwithstand22 ing the receipt of any preconstruction assistance for

23 any project, no additional financial assistance under

24 this Act for such project may be provided without
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1 the specific approval by the Corporation or the In2 surance Corporation, as the case may be, for such

3 additional assistance.

4 (5) FEES.—A fee may be charged for the re5 view of any project proposal in such amount as may

6 be deemed appropriate by the Corporation or the In7 surance Corporation to cover the cost of such review.

8 (d) STATE ELIGIBILITY.—

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

10 period beginning on the date of the enactment of

11 this Act, no financial assistance may be provided by

12 the Corporation or the Insurance Corporation for

13 the development of any infrastructure facility pro14 posed for assistance by a State, or a revolving fund

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

16 (A) an evaluation process which is certified

17 by the Secretary, in accordance with regulations

18 which the Secretary shall prescribe before the

19 end of the 6-month period beginning on such

20 date of enactment, as being designed to ascer21 tain the extent to which major work with re22 spect to infrastructure facilities within the

23 State can be financed by relying on any revenue

24 reasonably obtainable from such facilities and

25 other dedicated revenue sources; and
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1 (B) a program which is certified by the

2 Secretary, in accordance with regulations which

3 the Secretary shall prescribe before the end of

4 such 6-month period, as being reasonably de5 signed to promote the objective set forth in Ex6 ecutive Order No. 12893 of January 26, 1994,

7 of affording the opportunity for innovative pub8 lic-private initiatives with respect to major

9 work, consistent with the public interest.

10 (2) ACTIVITIES WITH NONSTATE ENTITIES.—

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

12 date of the enactment of this Act, the Corporation

13 and the Insurance Corporation each may continue to

14 undertake activities with respect to projects within a

15 State relating to the development of infrastructure

16 facilities which have been submitted by entities other

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

18 including municipalities, regional authorities, and

19 private-public partnerships, if the infrastructure fa20 cilities meet the criteria for assistance established

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

22 in which such facility or facilities are to be located

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

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

25 paragraph (1), the term ‘‘major work’’ means the
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1 construction of a new infrastructure facility, or the

2 reconstruction, rehabilitation, replacement, or expan3 sion of an existing infrastructure facility, involving

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

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

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

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

8 the Insurance Corporation shall each seek to provide as9 sistance to projects involving the development of infra10 structure facilities which—

11 (1) the Corporation or the Insurance Corpora12 tion, as the case may be, determines are ready to

13 move forward promptly; and

14 (2) meet all other requirements of this Act.

15 (f) DEVELOPMENT RISK INSURANCE.—

16 (1) IN GENERAL.—Any project on the list es17 tablished pursuant to subsection (c)(2) shall be eligi18 ble to apply to the Corporation for development risk

19 insurance in accordance with this subsection to in20 sure against the risk of loss that would result if a

21 project does not proceed within a specified time

22 frame as the result of the failure to secure relevant

23 permits or specified Federal, State, or local approv24 als.
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1 (2) TERMS AND SCOPE OF COVERAGE.—Devel2 opment risk insurance provided under this sub3 section shall—

4 (A) contain such limitations, deductibles,

5 exclusions, and exceptions as the Corporation

6 shall establish; and

7 (B) apply only to developmental costs in8 curred after the date of the approval of the ap9 plication for such insurance.

10 (3) MAXIMUM ON INSURANCE OF

11 PRECONSTRUCTION RISK.—The Corporation shall

12 not insure more than 50 percent of the

13 preconstruction phase development risk of any

14 project, as determined by the Corporation.

15 (4) ADDITIONAL CONDITIONS.—The Corpora16 tion may impose such other conditions and require17 ments in connection with any insurance provided

18 under this subsection as the Corporation may deter19 mine to be appropriate, including requirements for

20 audits of costs and other matters.

21 (5) FEES FOR INSURANCE.—The Corporation

22 may charge such fees and obtain such other com23 pensation for providing insurance coverage under

24 this subsection as the Corporation, in the Corpora25 tion’s discretion, shall determine to be appropriate.
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1 (6) MAXIMUM EXPOSURE OF CORPORATION.—

2 The total outstanding exposure of the Corporation

3 with respect to insurance provided under this sub4 section may not exceed the amount which is equal to

5 5 percent of the sum of the capital, surplus, and re6 tained earnings of the Corporation, as measured at

7 the time any such insurance is provided.

8 (g) DISCRETION OF CORPORATION AND INSURANCE

9 CORPORATION.—Consistent with other provisions of this

10 Act, any determination of the Corporation or the Insur11 ance Corporation to provide assistance to any project, and

12 the manner in which such assistance is provided, including

13 the terms, conditions, fees and charges in respect thereof,

14 shall be at the sole discretion of the Corporation or the

15 Insurance Corporation, as the case may be.

16 (h) INDEPENDENT INVESTMENT COMMITTEE.—Any

17 final decision to provide or not provide assistance under

18 this Act by the Corporation or the Insurance Corporation

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

20 investment committee, of the respective corporation, which

21 shall be comprised of senior officers of the Corporation

22 and the Insurance Corporation, as the case may be, ap23 pointed to such committee by the respective board of direc24 tors, which committees shall not have any nonofficer direc25 tor members.
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1 (i) STATE AND LOCAL PERMITS REQUIRED.—The

2 provision of assistance by the Corporation or the Insur3 ance Corporation in accordance with this section shall not

4 be deemed to relieve any recipient of assistance or the re5 lated project of any obligation to obtain required State and

6 local permits and approvals.

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

8 other entity receiving assistance from the Corporation or

9 the Insurance Corporation shall make annual reports to

10 the Corporation or the Insurance Corporation, as the case

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

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

13 all entities with a development, ownership, or operational

14 interest in a project assisted or proposed to be assisted

15 pursuant to this Act.

16 SEC. 9. CAPITALIZATION AND ORGANIZATION OF THE COR17 PORATION AND THE INSURANCE CORPORA18 TION.

19 (a) CAPITALIZATION.—

20 (1) CAPITALIZATION OF THE CORPORATION.—

21 (A) VOTING COMMON STOCK.—Effective

22 for any fiscal year only to such extent and in

23 such amounts as are provided in advance in ap24 propriation Acts, the Secretary shall subscribe
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1 for and purchase, in each of the 3 years follow2 ing the date of enactment of this Act, voting

3 common stock of the Corporation having an ag4 gregate purchase price in each year of

5 $1,000,000,000, except that no such purchase

6 shall occur after the transition date.

7 (B) LIMITATION ON SALE OF SECURITIES

8 BY SECRETARY.—Securities purchased by the

9 Secretary may not be sold or otherwise trans10 ferred by the Secretary unless such sale or

11 transfer is effected pursuant to section 13 or is

12 explicitly authorized by an Act of Congress.

13 (2) CAPITALIZATION OF THE INSURANCE COR14 PORATION.—

15 (A) IN GENERAL.—The Corporation may

16 subscribe for and purchase voting common

17 stock of the Insurance Corporation in such

18 amounts and at such times as the board of di19 rectors of the Corporation shall from time to

20 time consider appropriate.

21 (B) LIMITATION ON INVESTMENT BY COR22 PORATION.—Not more than 25 percent of the

23 capital, surplus, and retained earnings of the

24 Corporation may be invested by the Corporation
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1 in the Insurance Corporation without the con2 sent of the Secretary, measured at the time of

3 any such investment.

4 (3) REPURCHASE OF OUTSTANDING OBLIGA5 TIONS.—The Corporation and the Insurance Cor6 poration may purchase in the open market any of

7 their respective outstanding obligations at any time

8 and at any price.

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

10 (1) CORPORATION.—

11 (A) PRINCIPAL OFFICE.—The Corporation

12 shall maintain its principal office in the District

13 of Columbia, and shall be deemed, for purposes

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

15 District of Columbia.

16 (B) APPLICABILITY OF DISTRICT OF CO17 LUMBIA BUSINESS CORPORATION ACT.—To the

18 extent not inconsistent with this Act, the Cor19 poration shall be subject to the District of Co20 lumbia Business Corporation Act.

21 (2) INSURANCE CORPORATION.—

22 (A) PLACE OF BUSINESS.—The Insurance

23 Corporation shall maintain its principal office

24 in the District of Columbia, and shall be
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1 deemed, for purposes of venue in civil actions,

2 to be a resident thereof.

3 (B) APPLICABILITY OF DISTRICT OF CO4 LUMBIA BUSINESS CORPORATION ACT.—To the

5 extent not inconsistent with this Act, the Insur6 ance Corporation shall be subject to the District

7 of Columbia Business Corporation Act.

8 (3) APPLICABILITY OF STATE INSURANCE

9 LAWS.—Before the transition date, the Corporation

10 and the Insurance Corporation shall not be subject

11 to the provisions of the law of any State or political

12 subdivision of any State regulating the ownership or

13 conduct of an insurance or surety business in any

14 jurisdiction.

15 (4) EXEMPTION FROM TAXATION.—

16 (A) ON AND BEFORE TRANSITION DATE.—

17 On and before the transition date, the Corpora18 tion, the Insurance Corporation, and any other

19 subsidiary of the Corporation, including the

20 franchise, capital, reserves, surplus, securities

21 holdings, and income of the Corporation, the

22 Insurance Corporation, or any such subsidiary

23 shall be exempt from taxation now or hereafter

24 imposed by the United States, any State, or
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1 any county, municipality, or local taxing au2 thority.

3 (B) AFTER TRANSITION DATE.—After the

4 transition date, the Corporation, the Insurance

5 Corporation, and any other subsidiary of the

6 Corporation, including the franchise, capital, re7 serves, surplus, securities holdings, and income

8 of the Corporation, the Insurance Corporation,

9 or any such subsidiary shall be exempt from all

10 taxation now or hereafter imposed by the

11 United States, any State, or any county, mu12 nicipality, or local taxing authority in any

13 State, provided that the Corporation, the Insur14 ance Corporation and any other subsidiary of

15 the Corporation shall be subject to Federal in16 come taxation.

17 SEC. 10. MANAGEMENT OF THE CORPORATION.

18 (a) BOARD OF DIRECTORS.—

19 (1) NUMBER AND APPOINTMENT.—Subject to

20 the provisions of section 13, the Corporation shall

21 have a board of directors consisting of 12 members,

22 9 of whom shall be appointed by the President.

23 (2) REQUIRED EXPERTISE.—The President

24 shall appoint individuals to the board of directors of

25 the Corporation with a demonstrated experience and
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1 expertise in the general field of infrastructure

2 project development, finance, or related disciplines.

3 (3) ADDITIONAL SELECTION CRITERIA.—The

4 President shall ensure that, of the nonofficer direc5 tors appointed to the board of directors, a minimum

6 of 6 shall be selected from among representatives of

7 the private sector, of which—

8 (A) 2 shall be representatives of organized

9 labor; and

10 (B) 2 shall be individuals involved in the

11 field of public-private infrastructure finance and

12 related disciplines.

13 (4) CONSULTATION WITH THE NATIONAL GOV14 ERNORS’ CONFERENCE.—The President shall select

15 2 of the nonofficer directors to be appointed to the

16 board of directors after consulting with and consid17 ering the recommendations of the National Gov18 ernors’ Conference.

19 (5) APPOINTMENT OF OFFICERS TO THE

20 BOARD.—A majority of the nonofficer members of

21 the board shall appoint the president of the Corpora22 tion who shall serve on the board of directors. The

23 president of the Corporation shall select 2 executive

24 officers to be appointed to the board, subject to con25 firmation by a majority of the board.
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1 (6) TERMS.—

2 (A) PRESIDENTIAL APPOINTEES.—Each

3 director appointed by the President shall be ap4 pointed for a term of 4 years, except as pro5 vided in subparagraph (B).

6 (B) INITIAL PRESIDENTIAL AP7 POINTEES.—As designated by the President, of

8 the directors first appointed by the President—

(i) 1 9 ⁄3 shall be appointed for a term of

10 2 years;

(ii) 1 11 ⁄3 shall be appointed for a term

12 of 3 years; and

(iii) 1 13 ⁄3 shall be appointed for a term

14 of 4 years.

15 (C) OFFICER DIRECTORS.—Officer direc16 tors of the Corporation shall serve for a period

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

18 the Corporation.

19 (D) INTERIM APPOINTMENTS.—Any direc20 tor appointed to fill a vacancy occurring before

21 the expiration of the term for which the direc22 tor’s predecessor was appointed shall be ap23 pointed only for the remainder of that term.
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1 (E) CONTINUATION OF SERVICE.—A direc2 tor may serve after the expiration of that direc3 tor’s term until a successor has taken office.

4 (7) VACANCIES.—A vacancy in the board of di5 rectors shall be filled in the manner in which the

6 original appointment was made.

7 (8) REAPPOINTMENT.—

8 (A) PRESIDENTIAL APPOINTEES.—Mem9 bers of the board of directors appointed by the

10 President may be reappointed by the President,

11 consistent with the requirements of this section.

12 (B) OFFICER DIRECTORS.—The president

13 of the Corporation shall be reappointed to the

14 board by the nonofficer directors for so long as

15 such individual continues to serve as president

16 of the Corporation. Officer directors of the

17 board selected by the president of the Corpora18 tion may be reappointed by the president of the

19 Corporation, consistent with the requirements

20 of this section.

21 (9) REMOVAL.—

22 (A) PRESIDENTIAL APPOINTEES.—A direc23 tor appointed by the President shall be subject

24 to removal only for cause.
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1 (B) OFFICER DIRECTORS.—Officer direc2 tors of the Corporation shall be subject to re3 moval from the board in the discretion of a ma4 jority of the board, except that the president of

5 the Corporation shall continue to serve on the

6 board for so long as he or she serves as presi7 dent of the Corporation.

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

9 quorum.

10 (11) CHAIRPERSON.—The chairperson of the

11 board of directors shall be selected by a majority of

12 the board from among the nonofficer directors of the

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

14 a new chairperson is selected.

15 (12) STATUS AND COMPENSATION OF BOARD

16 MEMBERS.—

17 (A) NONOFFICER DIRECTORS.—Members

18 of the board of directors who are not officers of

19 the Corporation shall serve on a part-time basis

20 and shall receive a per diem, when engaged in

21 the actual performance of Corporation business,

22 plus reasonable reimbursement for travel, sub23 sistence and other necessary expenses incurred

24 in the performance of their duties.
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1 (B) OFFICER DIRECTORS.—Members of

2 the board of directors who are officers of the

3 Corporation shall not be entitled to receive any

4 salary or other compensation for services as a

5 director of the Corporation, but may receive

6 reasonable reimbursement for travel, subsist7 ence and other necessary expenses incurred in

8 the performance of their duties as directors of

9 the Corporation.

10 (13) CONFLICTS OF INTEREST.—

11 (A) IN GENERAL.—Nonofficer directors

12 shall have no responsibility for, and shall not

13 seek to influence, any decision of the independ14 ent investment committee established pursuant

15 to section 8(h).

16 (B) CONSULTATION.—Notwithstanding

17 subparagraph (A), the investment committee

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

19 committee’s own initiative, consult with the

20 board of directors as the committee sees fit.

21 (C) LIMITATION ON CONSULTATION.—No

22 nonofficer director of the Corporation who has,

23 or is affiliated with a person who has, an inter24 est in any project under consideration for as25 sistance under this Act shall participate in any
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1 consultation under subparagraph (B) with re2 spect to such project.

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

4 meet at any time pursuant to the call of the chair5 person or a majority of the directors and as provided

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

7 once each calendar quarter.

8 (15) DUTIES.—In addition to any duties estab9 lished under this Act and the bylaws of the Corpora10 tion, the board of directors shall determine the gen11 eral policies which shall govern the operations of the

12 Corporation in accordance with this Act.

13 (16) DELEGATION OF AUTHORITY.—The board

14 of directors may delegate duties and powers of the

15 board to such committees of the board as the board

16 may determine to be appropriate.

17 (b) OFFICERS OF THE CORPORATION.—

18 (1) PRESIDENT OF THE CORPORATION.—The

19 president of the Corporation shall be the chief execu20 tive officer of the Corporation, with such executive

21 functions, powers, and duties as may be prescribed

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

23 (2) APPOINTMENT OF OFFICERS.—The presi24 dent of the Corporation shall, with the approval of

25 a majority of the board, appoint qualified individuals
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1 to such executive officer positions as may be pro2 vided for in the bylaws of the Corporation, and shall

3 define their duties. The president may appoint, re4 move, fix the compensation of, and define the duties

5 of other officers as provided in the bylaws.

6 (3) COMPENSATION.—The compensation of the

7 president and the executive officers of the Corpora8 tion shall be determined by the board of directors of

9 the Corporation, in the discretion of the board of di10 rectors.

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

12 Corporation shall not participate in any review or

13 decision affecting a project under consideration for

14 assistance under this Act if such officer has, or is

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

16 project.

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

18 Corporation may be removed in the discretion of a

19 majority of the board of directors.

20 SEC. 11. MANAGEMENT OF THE INSURANCE CORPORATION.

21 (a) BOARD OF DIRECTORS.—

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

23 provisions of section 13, the Insurance Corporation

24 shall have a board of directors consisting of 12
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1 members elected by the stockholders of the Insur2 ance Corporation.

3 (2) INITIAL APPOINTMENT OF DIRECTORS.—

4 The initial directors of the Insurance Corporation

5 shall be appointed by the board of directors of the

6 Corporation.

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

8 comprised of individuals who have a demonstrated

9 expertise and experience in the field of credit en10 hancement or insurance and related disciplines, a

11 minimum of 9 of whom shall be selected from among

12 representatives of the private sector.

13 (4) TERMS.—

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

15 elected or appointed for a term of 2 years, ex16 cept as provided in subparagraph (B).

17 (B) INTERIM APPOINTMENTS.—Any direc18 tor elected or appointed to fill a vacancy occur19 ring before the expiration of the term for which

20 the director’s predecessor was appointed shall

21 be elected or appointed only for the remainder

22 of that term.

23 (C) CONTINUATION OF SERVICE.—A direc24 tor may serve after the expiration of that direc25 tor’s term until a successor has taken office.
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1 (5) VACANCIES.—A vacancy in the board of di2 rectors shall be filled in the manner in which the

3 original appointment was made, except that the by4 laws may provide for the appointment by the board

5 of directors of a director to fill a vacancy occurring

6 before the expiration of the term for which the direc7 tor’s predecessor was elected or appointed.

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

9 quorum.

10 (7) CHAIRPERSON.—

11 (A) ELECTION.—The chairperson of the

12 board of directors shall be elected by the board

13 of directors from among the directors on the

14 board.

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

16 chairperson shall be 1 year or until a new chair17 person is elected.

18 (8) STATUS AND COMPENSATION OF BOARD

19 MEMBERS.—Members of the board of directors shall

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

21 diem, when engaged in the actual performance of In22 surance Corporation business, plus reasonable reim23 bursement for travel, subsistence and other nec24 essary expenses incurred in the performance of their

25 duties.
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1 (9) CONFLICTS OF INTEREST.—

2 (A) IN GENERAL.—Nonofficer directors

3 shall have no responsibility for, and shall not

4 seek to influence, any decision of the independ5 ent investment committee established pursuant

6 to section 8(h).

7 (B) CONSULTATION.—Notwithstanding

8 subparagraph (A), the investment committee

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

10 committee’s own initiative, consult with the

11 board of directors as the committee sees fit.

12 (C) LIMITATION ON CONSULTATION.—No

13 director who has, or is affiliated with any per14 son who has, an interest in any project under

15 consideration for assistance under this Act shall

16 participate in any such consultation with re17 spect to such project.

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

19 meet at any time pursuant to the call of the chair20 person or a majority of the directors and as provided

21 by the bylaws of the Insurance Corporation, but not

22 less than once each calendar quarter.

23 (11) DUTIES.—In addition to any duties estab24 lished under this Act or the bylaws of the Insurance

25 Corporation, the board of directors shall determine
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1 the general policies which shall govern the oper2 ations of the Insurance Corporation in accordance

3 with this Act.

4 (12) DELEGATION OF AUTHORITY.—The board

5 of directors may delegate duties and powers of the

6 board to such committees of the board as the board

7 may determine to be appropriate.

8 (b) OFFICERS OF THE INSURANCE CORPORATION.—

9 (1) PRESIDENT OF THE INSURANCE CORPORA10 TION.—There shall be a position of president of the

11 Insurance Corporation who shall be the chief execu12 tive officer of the Insurance Corporation, with such

13 executive functions, powers, and duties as may be

14 prescribed by the bylaws or by the board of direc15 tors.

16 (2) APPOINTMENT OF OFFICERS.—The chair17 person of the board of directors of the Insurance

18 Corporation shall, with the approval of a majority of

19 the board, appoint a qualified individual to the posi20 tion of president of the Insurance Corporation. The

21 president of the Insurance Corporation shall, with

22 the approval of a majority of the board, appoint

23 qualified individuals to such executive officer posi24 tions as may be provided for in the bylaws of the In25 surance Corporation, and shall define their duties.
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1 The president may appoint, remove, fix the com2 pensation of, and define the duties of other officers

3 as provided in the bylaws.

4 (3) COMPENSATION.—The compensation of the

5 president and the executive officers of the Insurance

6 Corporation shall be determined by the board of di7 rectors of the Insurance Corporation, in the discre8 tion of the board of directors.

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

10 Insurance Corporation shall not participate in any

11 review or decision affecting a project under consider12 ation for assistance under this Act if such officer

13 has, or is affiliated with a person who has, an inter14 est in such project.

15 (5) REMOVAL.—Any executive officer of the In16 surance Corporation may be removed in the discre17 tion of a majority of the board of directors.

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

19 (a) GENERAL.—All meetings of the full board of di20 rectors held to conduct the business of the Corporation

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

22 and shall be preceded by reasonable notice.
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1 (b) CLOSED MEETINGS.—Pursuant to such rules as

2 the Corporation and the Insurance Corporation may es3 tablish through their bylaws, the respective board of direc4 tors may close a meeting of the board if at the meeting

5 there is likely to be disclosed information which could ad6 versely affect or lead to speculation relating to an infra7 structure project under consideration for assistance under

8 this Act, or in financial or securities or commodities mar9 kets or institutions, utilities, or real estate. The deter10 mination to close any meeting of either board of directors

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

12 public, and preceded by reasonable notice. The respective

13 board of directors shall prepare minutes of any meeting

14 which is closed to the public and make such minutes avail15 able as soon as the considerations necessitating closing

16 such meeting no longer apply.

17 SEC. 13. TRANSITION TO GOVERNMENT-SPONSORED EN18 TERPRISE.

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

20 Act, the Corporation shall prepare a strategic plan for the

21 transition of NIC to a government-sponsored enterprise

22 (as defined in section 3(8) of the Congressional Budget

23 and Impoundment Control Act of 1974) and for the sale
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1 or transfer to investors other than the Federal Govern2 ment, as set forth in subsection (b), of the voting securi3 ties of the Corporation. The Corporation shall revise such

4 transition plan as needed.

5 (b) PLAN; PENSION PLAN PARTICIPATION.—

6 (1) IN GENERAL.—The strategic plan shall in7 clude consideration of alternative means for effecting

8 such transition through a broad distribution to long9 term investors, including by a public offering of

10 stock or convertible stock or debt.

11 (2) PENSION PLAN PARTICIPATION.—The stra12 tegic plan shall include provisions that specify that

13 the initial purchasers of voting securities of the Cor14 poration or of nonvoting securities which are con15 vertible to such voting securities on the transition

16 date (disregarding any underwriters of such securi17 ties) shall be pension plans.

18 (c) MEANS OF TRANSFER.—

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

20 for a phased transfer of ownership or for complete

21 transfer at a single point in time.

22 (2) RULES APPLICABLE IN THE CASE OF A

23 PHASED TRANSITION.—If the plan calls for phased

24 transfer of ownership—
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1 (A) such transition shall be deemed to

2 occur when 100 percent of the voting securities

3 of the Corporation have been transferred to or

4 are held by investors other than the Federal

5 Government, and the investment of the Federal

6 Government in the Corporation has been repaid

7 or converted as provided in subsection (h);

8 (B) before the transition date, all equity

9 securities of the Corporation held by investors

10 other than the Federal Government (or any eq11 uity security into which any other security is

12 convertible) shall be nonvoting securities; and

13 (C) on and after the transition date, non14 voting equity securities of the Corporation held

15 by investors other than the Federal Government

16 (or into which other securities are convertible)

17 may, in accordance with the terms of such secu18 rities, be converted or become convertible into

19 voting securities.

20 (d) REQUIREMENT OF PRESIDENTIAL APPROVAL.—

21 The Corporation may not implement the transition plan

22 without the approval of the President, and shall seek re23 approval if the plan is materially altered.

24 (e) NOTIFICATION OF CONGRESS.—
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1 (1) IN GENERAL.—The Corporation shall notify

2 the Congress of—

3 (A) the Corporation’s intent to implement

4 the transition plan; and

5 (B) any material alteration of a transition

6 plan previously submitted to the Congress.

7 (2) REPORT.—Within 30 days of any notifica8 tion of the Congress under paragraph (1), the

9 Comptroller General of the United States shall sub10 mit a report to Congress evaluating the extent to

11 which—

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

13 would result in ongoing obligations (other than

14 contemplated by subsection (h)) or undue cost

15 to the Federal Government; and

16 (B) the cash proceeds (or projected range

17 thereof) to be provided to the Federal Govern18 ment, or the securities proposed to be received

19 in exchange for the investment of the Federal

20 Government in the Corporation or portion

21 thereof, represents the full recoupment of such

22 investment (after taking into account any divi23 dends paid to the Federal Government).

24 (f) CONGRESSIONAL REVIEW.—The Corporation may

25 implement the plan not less than 60 days after notification
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1 of the Congress, if the approval of the President referred

2 to in subsection (d) has been received.

3 (g) DEPOSIT OF PROCEEDS.—Any cash proceeds re4 ceivable by the Federal Government pursuant to this sec5 tion shall be deposited in the general fund of the Treasury.

6 (h) CONVERSION OF FEDERAL GOVERNMENT IN7 VESTMENT.—Upon the implementation of the transition

8 plan, the voting equity securities of the Corporation held

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

10 transition, that portion of the voting equity securities

11 which are subject to such phase shall be repurchased by

12 the Corporation or converted to long-term subordinated

13 debt securities having a par amount not less than the

14 amounts appropriated pursuant to section 19 and subject

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

16 by such plan.

17 (i) BOARD OF DIRECTORS.—

18 (1) CORPORATION.—

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

20 the 120-day period beginning on the transition

21 date, a special meeting of the stockholders of

22 the Corporation shall be held, at which all di23 rectors of the Corporation shall be elected to

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

25 successor has been elected.
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1 (B) NOMINATION; SELECTION CRITERIA.—

2 The candidates for election to the board of di3 rectors under paragraph (1) shall be nominated

4 by the existing board of directors and 4 of such

5 candidates shall be nominated in accordance

6 with the selection criteria set out in section

7 10(a)(3).

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

9 election of a board of directors pursuant to sub10 paragraph (A), the directors shall be elected

11 and subject to removal by the stockholders of

12 the Corporation, as provided in the District of

13 Columbia Business Corporation Act, except that

14 the nomination of candidates for each election

15 of the board of directors shall continue to re16 flect the requirements of section 10(a)(3).

17 (2) INSURANCE CORPORATION.—

18 (A) INITIAL BOARD.—Promptly following

19 the special meeting of the stockholders of the

20 Corporation pursuant to paragraph (1), a spe21 cial meeting of the stockholders of the Insur22 ance Corporation shall be held, at which all di23 rectors or the Insurance Corporation shall be

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

25 director’s successor has been elected.
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1 (B) SUBSEQUENT BOARDS.—After the 1st

2 election of a board of directors pursuant to sub3 paragraph (A), the directors shall be elected

4 and subject to removal by the stockholders of

5 the Insurance Corporation, as provided in the

6 District of Columbia Business Corporation Act.

7 (j) TRANSMITTAL OF FINAL PLAN AFTER COMPLE8 TION.—The Corporation shall transmit copies of the final

9 strategic plan for transition to the President and the Con10 gress upon completion of such transition.

11 SEC. 14. STATUS AND APPLICABILITY OF CERTAIN FED12 ERAL LAWS.

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

14 transition date, the Corporation, the Insurance Corpora15 tion, and any other subsidiary of the Corporation, shall—

16 (1) not be agencies of the United States; and

17 (2) comply with all Federal laws regulating the

18 budgetary and auditing practices of a government

19 corporation, except as otherwise provided in this Act.
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1 (b) SUBSEQUENT TO THE TRANSITION DATE.—On

2 and after the transition date, the Corporation, the Insur3 ance Corporation, and any other subsidiary of the Cor4 poration shall not be considered to be an agency, instru5 mentality, or establishment of the United States Govern6 ment or a government corporation or a government-con7 trolled corporation, for purposes of any Federal law, ex8 cept as otherwise provided in this Act.

9 (c) AUTHORIZED INVESTMENTS AND SECURITY.—All

10 obligations issued by the Corporation shall be authorized

11 investments for any person created under the laws of the

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

13 person may hold or invest in obligations issued by or guar14 anteed as to principal or interest by the United States or

15 any agency or instrumentality of the United States.

16 (d) EFFECT OF AND EXEMPTIONS FROM OTHER

17 LAWS.—

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

19 securities and other obligations issued by the Cor20 poration or the Insurance Corporation pursuant to

21 this Act shall be deemed to be exempt securities

22 within the meaning of laws administered by the Se23 curities and Exchange Commission to the same ex24 tent as securities which are direct obligations of, or
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1 obligations fully guaranteed as to principal or inter2 est by, the United States.

3 (2) OPEN MARKET OPERATIONS AND STATE

4 TAX EXEMPT STATUS.—The obligations of the Cor5 poration shall be deemed to be obligations of the

6 United States for the purposes of the provision des7 ignated as (b)(2) of the 2nd undesignated paragraph

8 of section 14 of the Federal Reserve Act and section

9 3124 of title 31, United States Code.

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

11 priority established in favor of the United States by

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

13 not apply with respect to any indebtedness of the

14 Corporation or the Insurance Corporation.

15 (e) FEDERAL RESERVE BANKS AS DEPOSITARIES,

16 CUSTODIANS, AND FISCAL AGENTS.—The Federal reserve

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

18 agents of, the Corporation and the Insurance Corporation.

19 (f) ACCESS TO BOOK-ENTRY SYSTEM.—The Sec20 retary may authorize the Corporation and the Insurance

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

22 reserve system.

23 SEC. 15. COMPLIANCE WITH DAVIS-BACON ACT.

24 NIC shall take such action as may be necessary to

25 ensure that projects assisted in whole or in part under
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1 the provisions of this Act shall incorporate a provision re2 quiring in any contract relating to any construction, recon3 struction, rehabilitation, replacement, or expansion of

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

5 the locality, as predetermined by the Secretary of Labor

6 pursuant to the Act of March 3, 1931 (40 U.S.C. 276a;

7 commonly referred to as the ‘‘Davis-Bacon Act’’) shall be

8 paid to all laborers and mechanics employed to perform

9 such contracts.

10 SEC. 16. OBLIGATIONS NOT FEDERALLY GUARANTEED;

11 STATE LAWS.

12 (a) STATUS OF SECURITIES.—

13 (1) NO FULL FAITH AND CREDIT OF THE

14 U.S.—Obligations of the Corporation or the Insur15 ance Corporation, and obligations insured by any

16 such corporation shall not be obligations of, or guar17 anteed as to principal or interest by, the United

18 States or any agency of the United States and the

19 obligations shall so plainly state.
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1 (2) FINANCING NOT TREATED AS U.S. GUARAN2 TEE.—The provision of assistance of any kind or na3 ture from NIC shall not be treated as a direct or in4 direct guarantee of any payment of principal or in5 terest on any security by the United States for pur6 poses of section 149(b) of the Internal Revenue

7 Code of 1986 or any other law.

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

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

10 financial assistance provided by any governmental entity

11 in connection with such assistance under this Act shall be

12 valid and lawful notwithstanding any State or local restric13 tions regarding extensions of credit or other benefits to

14 private persons or entities, or other similar restrictions.

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

16 CONGRESS.

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

18 shall be maintained in accordance with generally accepted

19 accounting principles and shall be subject to an annual

20 audit by independent public accountants of nationally rec21 ognized standing.

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

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

24 fiscal year, a complete and detailed report with respect

25 to the preceding fiscal year, setting forth—
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1 (1) a summary of NIC’s operations, for such

2 preceding fiscal year;

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

4 with respect thereto prepared by the independent

5 public accountant reviewing such statements and a

6 copy of any report made on an audit conducted

7 under subsection (a) of this section;

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

9 securities outstanding at the end of such fiscal year,

10 with a statement of the amounts issued and re11 deemed or paid during such fiscal year; and

12 (4) the status of projects receiving funding or

13 other assistance pursuant to this Act, including dis14 closure of all entities with a development, ownership,

15 or operational interest in such projects.

16 (c) BOOKS AND RECORDS.—

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

18 books and records to support the financial trans19 actions of the Corporation, the Insurance Corpora20 tion, and subsidiaries of such corporations.

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

22 The books and records of NIC shall be maintained
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1 in accordance with recommended accounting prac2 tices and shall be open to inspection by the Sec3 retary and the Comptroller General of the United

4 States.

5 SEC. 18. TAX TREATMENT OF DISTRIBUTIONS FROM QUALI6 FIED RETIREMENT PLANS INVESTING IN

7 PUBLIC BENEFIT BONDS.

8 (a) IN GENERAL.—Section 72 of the Internal Reve9 nue Code of 1986 (relating to annuities; certain proceeds

10 of endowment and life insurance contracts) is amended by

11 redesignating subsection (w) as subsection (x) and by in12 serting after subsection (v) the following new subsection:

13 ‘‘(w) TREATMENT OF DISTRIBUTION FROM QUALI14 FIED RETIREMENT PLANS INVESTING IN PUBLIC BENE15 FIT BONDS.—

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

17 retirement plan which receives directly or indirectly

18 any interest on any public benefit bond (including

19 any payments in respect thereof made by a surety

20 or guarantor) for purposes of applying this section

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

22 investment in the contract shall be treated as includ23 ing such distributee’s allocable share of such interest

24 under the terms of the qualified retirement plan,
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1 and any such distribution shall be treated as a dis2 tribution described in subsection (e)(2)(B) in which

3 the distribution is allocable first to the investment in

4 the contract attributable to such interest.

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

6 case of a distribution to be made over more than one

7 calendar year, the amount of public benefit bond in8 terest to be taken into account with respect to a

9 given calendar year shall be the aggregate amount of

10 such interest allocable to the distributee as of the

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

12 final calendar year, the amount of public benefit

13 bond interest to be taken into account shall include

14 the amount of such interest received by the plan

15 during such year that is allocable to the plan partici16 pant with respect to whom the distribution is made.

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

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

19 any obligation issued after the date of the enactment

20 of this subsection if—

21 ‘‘(A) 95 percent or more of the net pro22 ceeds of such obligation are used in connection

23 with the financing or refinancing of 1 or more

24 infrastructure facilities,
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1 ‘‘(B) such obligation has received a pub2 lished rating, and

3 ‘‘(C) the development of such infrastruc4 ture facilities have been or will be undertaken

5 by a governmental entity or public-private part6 nership,

7 as such terms are defined in section 4 of the Na8 tional Infrastructure Development Act of 1997.

9 ‘‘(4) CERTIFICATION OF INFRASTRUCTURE FA10 CILITIES.—An issuer of an obligation of which 95

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

12 in connection with the financing or refinancing of 1

13 or more facilities may apply to the National Infra14 structure Development Corporation, in accordance

15 with such procedures as such corporation may estab16 lish, for certification that any such facility is an in17 frastructure facility (as defined in section 4 of the

18 National Infrastructure Development Act of 1997).

19 Certification by the Corporation shall create a pre20 sumption of such status, but shall not be binding on

21 the Secretary.

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

23 be a public benefit bond for purposes of this sub24 section unless it is designated as intended to be a
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1 public benefit bond on the date of issuance and

2 bears a legend to such effect.

3 ‘‘(6) QUALIFIED RETIREMENT PLAN.—For pur4 poses of this subsection, the term ‘qualified retire5 ment plan’ means—

6 ‘‘(A) a qualified retirement plan (as de7 fined in section 4974(c)), and

8 ‘‘(B) an eligible deferred compensation

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

10 ‘‘(7) TREATMENT OF DIVIDENDS FROM MUTUAL

11 FUNDS.—

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

13 subsection, in the case of any dividend (other

14 than a dividend described in section 854(a)) re15 ceived from a regulated investment company

16 which meets the requirements of section 852 for

17 the taxable year in which it paid the dividend—

18 ‘‘(i) the entire amount of such divi19 dend shall be treated as interest on a pub20 lic benefit bond if the aggregate interest on

21 such bonds received by such company dur22 ing the taxable year equals or exceeds 75

23 percent of its gross income, or

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

25 portion of such dividend shall be treated as
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1 interest on a public benefit bond based on

2 the portion of the company’s gross income

3 which consists of such interest.

4 ‘‘(B) NOTICE TO SHAREHOLDERS.—The

5 amount of any distribution by a regulated in6 vestment company which may be taken into ac7 count as interest on a public benefit bond for

8 purposes of this section shall not exceed the

9 amount so designated by the company in a writ10 ten notice to its shareholders mailed not later

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

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

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

14 include gain from the sale or other disposition

15 of stock or securities.’’.

16 (b) CONFORMING AMENDMENTS.—

17 (1) Subsection (w) of section 72 of the Internal

18 Revenue Code of 1986 is amended by adding the fol19 lowing new paragraph:

20 ‘‘(4) TREATMENT OF QUALIFYING PUBLIC BEN21 EFIT BOND INTEREST.—For purposes of subsections

22 (c)(1)(A) and (c)(2)(A), the total amount of public

23 benefit bond interest described in subsection (w)
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1 with respect to a participant in a qualified retire2 ment plan (determined without reference to the an3 nuity starting date) shall be treated as an invest4 ment in the contract.’’.

5 (c) EFFECTIVE DATE.—The amendment made this

6 section shall apply to distributions after the date of the

7 enactment of this Act.

8 SEC. 19. AUTHORIZATIONS.

9 (a) APPROPRIATIONS AUTHORIZED FOR ESTABLISH10 MENT.—There are hereby authorized to be appropriated

11 to the Secretary $30,000,000 for the purpose of facilitat12 ing the NIC’s initial operations.

13 (b) APPROPRIATIONS AUTHORIZED FOR CONDUCT OF

14 BUSINESS OF NIC.—There are authorized to be appro15 priated to the Secretary $1,000,000,000 for each of the

16 fiscal years 1998 through 2000 to make the capital con17 tributions in accordance with section 9(a)(1)(A) for the

18 purpose of carrying out this Act.

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

20 transition date, the funds appropriated under subsection

21 (b) shall be deposited in an account to be established in

22 the Treasury of the United States to be known as the

23 ‘‘National Infrastructure Development Corporation Ac24 count’’, which shall be available to the Corporation, with25 out need for further appropriation and without fiscal year
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1 limitation, for carrying out its purposes, functions and

2 powers, including the investment and reinvestment of

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

4 be subject to apportionment under subchapter II of chap5 ter 15 of title 31. The Secretary of the Treasury, in con6 sultation with the board of directors of the Corporation,

7 shall invest amounts in the account in public debt securi8 ties with maturities suitable to the needs of the account

9 and bearing interest at rates determined by the Secretary,

10 taking into consideration current market yields on out11 standing marketable obligations of the United States of

12 comparable maturities.

13 SEC. 20. PROHIBITION ON ADDITIONAL FEDERAL ASSIST14 ANCE.

15 Except as otherwise specifically provided by sections

16 13 and 19, NIC shall receive no appropriations, loans, or

17 other financial assistance from the Federal Government.

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