I

105TH CONGRESS

1ST SESSION H. R. 713

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 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 Corporation Act’’.
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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.

14 (7) Such a national entity will provide for sig15 nificant and sustained job growth in critical sectors

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

17 infrastructure needs by leveraging limited Federal

18 resources with private capital.

19 SEC. 3. PURPOSES.

20 The purposes of this Act are as follows:

21 (1) To establish the National Infrastructure

22 Development Corporation for the purpose of making

23 new sources of financing available for the develop24 ment of infrastructure facilities.
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1 (2) To establish a subsidiary of the Corpora2 tion, the National Infrastructure Insurance Corpora3 tion, to issue insurance, reinsurance and related un4 dertakings in respect of the issuance of obligations

5 related to the development of infrastructure facili6 ties.

7 SEC. 4. DEFINITIONS.

8 The following definitions shall apply for purposes of

9 this Act unless the context requires otherwise:

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

11 means the National Infrastructure Development

12 Corporation established under section 5(a).

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

14 and ‘‘develop’’ mean, with respect to an infrastruc15 ture facility, any—

16 (A) preconstruction planning, feasibility re17 view, permitting and design work and other

18 preconstruction activities;

19 (B) construction, reconstruction, rehabili20 tation, replacement, or expansion; and

21 (C) operation and maintenance.

22 (3) ENTITY.—The term ‘‘entity’’ means an in23 dividual, corporation, partnership, joint venture,

24 trust or governmental entity or instrumentality.
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1 (4) INFRASTRUCTURE FACILITY.—The term

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

3 bridge, tunnel, airport, mass transportation vehicle

4 or system, passenger rail vehicle or system, inter5 modal transportation facility, waterway, commercial

6 port, drinking or waste water treatment facility,

7 solid waste disposal facility, pollution control system,

8 hazardous waste facility, federally designated na9 tional information highway facility, school, and any

10 ancillary facility which forms a part of any such fa11 cility or is reasonably related to such facility, wheth12 er owned, leased or operated by a public entity or a

13 private entity or by a combination of such entities,

14 and the financing or refinancing of the development

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

16 by user fees or other dedicated revenue sources.

17 (5) INSURANCE CORPORATION.—The term ‘‘In18 surance Corporation’’ means the National Infra19 structure Insurance Corporation established pursu20 ant to section 5(b).

21 (6) NIC.—The term ‘‘NIC’’ means the Cor22 poration and all subsidiaries of the Corporation.

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

24 means a pension plan as defined in section 3(2) of
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1 the Employee Retirement Income Security Act of

2 1974, including any public pension plan.

3 (8) PUBLIC-PRIVATE PARTNERSHIP.—The term

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

5 (A) which is undertaking the development

6 of all or part of any infrastructure facility—

7 (i) pursuant to requirements estab8 lished in 1 or more contracts between such

9 entity and a State or an instrumentality of

10 a State; or

11 (ii) the activities of which with respect

12 to such facility are subject to regulation by

13 a State or any instrumentality of a State;

14 and

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

16 own, lease, or operate, such infrastructure facil17 ity in whole or in part, and at least 1 of the

18 participants in such entity is a nongovern19 mental entity.

20 (9) REVOLVING FUND.—The term ‘‘revolving

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

22 State or a political subdivision or instrumentality of

23 a State, the principal activity of which is to make
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1 loans, commitments, or other financial accommoda2 tion available for the development of 1 or more cat3 egories of infrastructure facilities.

4 (10) SECRETARY.—The term ‘‘Secretary’’

5 means the Secretary of the Treasury or the designee

6 of the Secretary.

7 (11) STATE.—The term ‘‘State’’ includes the

8 District of Columbia, Puerto Rico, Guam, American

9 Samoa, the Trust Territories of the Pacific Islands,

10 the Virgin Islands, the Northern Mariana Islands,

11 and any territory of the United States.

12 (12) TRANSITION DATE.—The term ‘‘transition

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

14 stock of the Corporation owned by the Secretary is

15 fully repurchased or converted in accordance with

16 section 13 and the transition of the Corporation to

17 a government-sponsored enterprise in accordance

18 with such section is completed.

19 SEC. 5. ESTABLISHMENT OF NIC.

20 (a) ESTABLISHMENT OF NATIONAL INFRASTRUC21 TURE DEVELOPMENT CORPORATION.—The National In22 frastructure Development Corporation is hereby estab23 lished as a wholly owned Government corporation subject
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1 to chapter 91 of title 31 (commonly referred to as the Gov2 ernment Corporation Control Act), except as otherwise

3 provided in this Act.

4 (b) ESTABLISHMENT OF NATIONAL INFRASTRUC5 TURE INSURANCE CORPORATION.—The National Infra6 structure Insurance Corporation is hereby established as

7 a subsidiary of the Corporation and as a wholly owned

8 Government corporation subject to chapter 91 of title 31,

9 except as otherwise provided in this Act.

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

11 and the Insurance Corporation shall each conduct their

12 respective businesses as self-supporting entities.

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

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

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

16 Corporation shall have the following powers:

17 (1) To make senior and subordinated loans and

18 purchase senior and subordinated debt securities

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

20 and enter into a binding commitment to make any

21 such loan or purchase any such security, on such

22 terms as the Corporation may determine, in the Cor23 poration’s discretion, to be appropriate, the proceeds

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

25 development of 1 or more infrastructure facilities,
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1 and subject to the provisions of paragraph (8) of

2 subsection (b), provide preconstruction phase assist3 ance in accordance with section 8(f).

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

5 and nonvoting equity securities of the Corporation

6 on such terms as the board of directors of the Cor7 poration may determine, subject to the provisions of

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

9 appropriate and to pay such dividends on any out10 standing stock as the board of directors shall deter11 mine from time to time.

12 (3) To make agreements and contracts with any

13 entity in furtherance of the business of the Corpora14 tion.

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

16 property of any Federal agency or instrumentality,

17 with the approval of such agency or instrumentality

18 and on a reimbursable basis, in carrying out the

19 purposes of this Act.

20 (5) To acquire, lease, pledge, exchange, and dis21 pose of real and personal property and otherwise ex22 ercise all the usual incidents of ownership of prop23 erty to the extent the exercise of such powers are ap24 propriate to and consistent with the purposes of the

25 Corporation.
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1 (6) To sue and be sued in the Corporation’s

2 corporate capacity in any court of competent juris3 diction, except that no attachment, injunction, or

4 similar process, mesne or final, may be issued

5 against the property of the Corporation or against

6 the Corporation with respect to such property.

7 (7) To indemnify the directors and officers of

8 the Corporation for liabilities arising out of the ac9 tions of the directors and officers in such capacity,

10 in accordance with, and subject to the limitations

11 contained in, the bylaws of the Corporation.

12 (8) To exercise all other lawful powers which

13 are necessary or appropriate to carry out, and are

14 consistent with, the purposes of the Corporation, in15 cluding the powers conferred upon a corporation by

16 the District of Columbia Business Corporation Act.

17 (b) LIMITATIONS ON THE CORPORATION.—

18 (1) ACTIONS CONSISTENT WITH SELF-SUPPORT19 ING ENTITY STATUS.—The Corporation shall con20 duct its business in a manner consistent with the re21 quirement of section 5(c).

22 (2) CONDITION ON DEBT ISSUANCE.—The Cor23 poration shall not issue any debt security under sub24 section (a)(2) unless, at the time of the issuance
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1 thereof, such security is rated by a nationally recog2 nized statistical rating organization at 1 of the 3

3 highest ratings of such organization.

4 (3) LIMITATION AND CONDITION ON ISSUANCE

5 OF DEBT AND NONVOTING EQUITY SECURITIES.—

6 (A) IN GENERAL.—Before the transition

7 date, the Corporation shall not issue any debt

8 security or nonvoting equity security under sub9 section (a)(2) without the prior consent of the

10 Secretary.

11 (B) APPROVAL OF SECRETARY FOR DEBT

12 SECURITY AFTER TRANSITION DATE.—On and

13 after the transition date, the Corporation shall

14 not issue any debt security under subsection

15 (a)(2) without the prior consent of the Sec16 retary.

17 (4) CONDITION ON VOTING EQUITY ISSU18 ANCE.—Before the transition date, the Corporation

19 shall not issue any voting security to any entity

20 other than the Secretary, and, on and after the tran21 sition date, the issuance of any such security shall

22 be subject to the provisions of section 13.

23 (5) SALE OF VOTING SECURITIES OF THE IN24 SURANCE CORPORATION.—Before the transition

25 date, voting securities of the Insurance Corporation
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1 purchased by the Corporation may not be sold or

2 otherwise transferred by the Corporation.

3 (6) INVESTMENTS CONSISTENT WITH PURPOSES

4 OF CORPORATION.—In order to achieve the Corpora5 tion’s purpose of effectively leveraging limited Fed6 eral resources with other public and private sources

7 of capital, the Corporation shall seek to maintain a

8 significant proportion of the Corporation’s infra9 structure investments in—

10 (A) subordinated securities; and

11 (B) securities issued with respect to infra12 structure facilities developed by public-private

13 partnerships.

14 (7) COORDINATION WITH STATE AND LOCAL

15 REGULATORY AUTHORITY.—The provision of finan16 cial assistance by the Corporation pursuant to this

17 Act shall not be construed as—

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

19 authority to approve or regulate rates of return

20 on private equity invested in a project; or

21 (B) otherwise superseding any State law or

22 regulation applicable to a project.

23 (8) LIMITATION ON PRECONSTRUCTION ASSIST24 ANCE.—The Corporation shall provide assistance in
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1 connection with the development of any infrastruc2 ture facility during the facility’s preconstruction

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

4 SEC. 7. INSURANCE CORPORATION’S POWERS AND LIMITA5 TIONS.

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

7 purposes of the Insurance Corporation as set forth in this

8 Act, the Insurance Corporation shall have the following

9 powers:

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

11 notes, debt instruments, loans, and any interest in

12 any such obligation or loan, the proceeds of which

13 are to be used to finance or refinance the develop14 ment of 1 or more infrastructure facilities.

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

16 property with respect to infrastructure facilities.

17 (3) To issue letters of credit and undertake

18 such obligations and commitments as the Insurance

19 Corporation deems necessary to carry out the pur20 poses described in paragraphs (1) and (2).

21 (4) To issue and sell voting and nonvoting eq22 uity securities on such terms as the board of direc23 tors of the Insurance Corporation may determine,

24 subject to the provisions of paragraphs (5) and (6)
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1 of subsection (b), to be appropriate and to pay divi2 dends on any outstanding stock as the board of di3 rectors of the Insurance Corporation shall determine

4 from time to time.

5 (5) To make agreements and contracts with any

6 entity in furtherance of the business of the Insur7 ance Corporation.

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

9 property of any Federal agency or instrumentality,

10 with the approval of such agency or instrumentality

11 and on a reimbursable basis, in carrying out the

12 purposes of this Act.

13 (7) To acquire, lease, pledge, exchange, and dis14 pose of real and personal property and otherwise ex15 ercise all the usual incidents of ownership of prop16 erty to the extent the exercise of such powers are ap17 propriate to and consistent with the purposes of the

18 Insurance Corporation.

19 (8) To sue and be sued in the Insurance Cor20 poration’s corporate capacity in any court of com21 petent jurisdiction, except that no attachment, in22 junction, or similar process, mesne or final, may be

23 issued against the property of the Insurance Cor24 poration or against the Insurance Corporation with

25 respect to such property.
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1 (9) To indemnify the directors and officers of

2 the Insurance Corporation for liabilities arising out

3 of the actions of the directors and officers in such

4 capacity, in accordance with, and subject to the limi5 tations contained in, the bylaws of the Insurance

6 Corporation.

7 (10) To exercise all other lawful powers which

8 are necessary or appropriate to carry out, and are

9 consistent with, the purposes of the Insurance Cor10 poration, including the powers conferred upon a cor11 poration by the District of Columbia Business Cor12 poration Act.

13 (b) LIMITATIONS ON THE INSURANCE CORPORA14 TION.—

15 (1) ACTIONS CONSISTENT WITH SELF-SUPPORT16 ING ENTITY STATUS.—The Insurance Corporation

17 shall conduct its business in a manner consistent

18 with the requirement of section 5(c).

19 (2) INSURANCE CORPORATION RATING RE20 QUIREMENT.—The Insurance Corporation shall not

21 issue any primary insurance or letter of credit with

22 respect to 1 or more infrastructure facilities unless,
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1 at the time of such issuance, the Insurance Corpora2 tion’s claims-paying ability is then rated by a nation3 ally recognized statistical rating organization at the

4 highest rating of such organization.

5 (3) LIMITATION ON REINSURANCE.—The Insur6 ance Corporation may write reinsurance in respect

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

8 respect to 1 or more infrastructure facilities issued

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

10 insurer is rated, at the time of issuance of such rein11 surance, by a nationally recognized statistical rating

12 organization at the highest rating of such organiza13 tion.

14 (4) LIMITATION ON INSURANCE AND OTHER AC15 TIVITIES.—The Insurance Corporation may issue

16 primary insurance or a letter of credit with respect

17 to 1 or more infrastructure facilities, except that not

18 less than 75 percent of the principal amount of all

19 obligations so insured or subject of a letter of credit

20 shall be obligations which are, or based on a pub21 lished or indicative rating would be, without such in22 surance or letter of credit, rated by a nationally rec23 ognized statistical rating organization in the fourth

24 or fifth rating categories of such organization (BBB

25 and BB; Baa and Ba, or their equivalents).
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1 (5) PRIOR CONSENT OF SECRETARY.—Before

2 the transition date, the Insurance Corporation shall

3 not issue any nonvoting equity security under sub4 section (a)(4) without the prior consent of the Sec5 retary.

6 (6) CONDITION ON VOTING EQUITY ISSU7 ANCE.—Before the transition date, the Insurance

8 Corporation shall not issue any voting security to

9 any entity other than the Corporation.

10 (7) COORDINATION WITH STATE AND LOCAL

11 REGULATORY AUTHORITY.—The provision of finan12 cial assistance by the Insurance Corporation pursu13 ant to this Act shall not be construed as—

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

15 authority to approve or regulate rates of return

16 on private equity invested in a project; or

17 (B) otherwise superseding any State law or

18 regulation applicable to a project.

19 SEC. 8. ELIGIBILITY CRITERIA FOR ASSISTANCE FROM THE

20 CORPORATION AND THE INSURANCE COR21 PORATION.

22 (a) GENERAL.—No financial assistance shall be avail23 able under this Act from the Corporation or the Insurance

24 Corporation unless the applicant for such assistance has

25 demonstrated to the satisfaction of the Corporation or the
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1 Insurance Corporation, as the case may be, that the

2 project for which such assistance is being sought meets—

3 (1) the requirements of this Act; and

4 (2) any criteria established in accordance with

5 this Act by the board of directors of the Corporation

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

7 (b) ESTABLISHMENT OF PROJECT CRITERIA.—

8 (1) IN GENERAL.—Consistent with the require9 ments of subsections (c) and (d), the boards of di10 rectors of the Corporation and the Insurance Cor11 poration shall each establish—

12 (A) criteria for determining eligibility for

13 financial assistance under this Act;

14 (B) disclosure and application procedures

15 to be followed by States, revolving funds, and

16 other entities to nominate projects for assist17 ance under this Act; and

18 (C) such other criteria as the board of di19 rectors of the Corporation or the Insurance

20 Corporation may consider to be appropriate for

21 purposes of carrying out this Act.

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

23 The criteria established pursuant to paragraph
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1 (1)(A) shall provide for the consideration of the fol2 lowing factors in considering eligibility for financial

3 assistance under this Act:

4 (A) The extent to which provision of assist5 ance by the Corporation or the Insurance Cor6 poration will further the objectives for infra7 structure investments established in Executive

8 Order No. 12893 of January 26, 1994, includ9 ing the stated objective of providing opportuni10 ties for ‘‘innovative public-private initiatives’’.

11 (B) The means by which development of

12 the infrastructure facility under consideration is

13 being financed, including—

14 (i) the terms and conditions and fi15 nancial structure of the proposed financ16 ing;

17 (ii) the financial assumptions and pro18 jections on which the project is based; and

19 (iii) based on consideration of clauses

20 (i) and (ii), whether the infrastructure fa21 cility will have the capacity to be self-sup22 porting.

23 (C) The likelihood that the provision of as24 sistance by the Corporation or the Insurance
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1 Corporation will cause such development to pro2 ceed more promptly and with lower costs for fi3 nancing to the public and private entities en4 gaged in developing such infrastructure facility

5 than would be the case without such assistance.

6 (D) The extent to which the provision of

7 assistance by the Corporation or the Insurance

8 Corporation maximizes the level of private in9 vestment in such infrastructure facility.

10 (3) LIMITATION ON CONDITIONS.—The Cor11 poration and the Insurance Corporation shall not

12 condition the approval of financial assistance for the

13 development of any infrastructure facility on a re14 quirement that a pension plan of a State or political

15 subdivision of a State make an investment in such

16 facility.

17 (c) SUBMISSION OF PROJECT PROPOSALS.—

18 (1) ACCEPTANCE OF PROPOSALS.—The Cor19 poration and the Insurance Corporation shall accept,

20 for consideration, project proposals relating to the

21 development of infrastructure facilities submitted by

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

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

24 subsection (b).
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1 (2) LIST OF PROJECTS UNDER CONSIDERATION

2 FOR ASSISTANCE.—Project proposals accepted pur3 suant to paragraph (1) and approved in principle

4 shall be placed on a list of projects being considered

5 for financial assistance under this Act.

6 (3) ELIGIBILITY FOR PRECONSTRUCTION AS7 SISTANCE.—Projects on the list established pursuant

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

9 preconstruction assistance in accordance with sub10 section (f).

11 (4) SUBSEQUENT APPROVALS.—Notwithstand12 ing the receipt of any preconstruction assistance for

13 any project, no additional financial assistance under

14 this Act for such project may be provided without

15 the specific approval by the Corporation or the In16 surance Corporation, as the case may be, for such

17 additional assistance.

18 (5) FEES.—A fee may be charged for the re19 view of any project proposal in such amount as may

20 be deemed appropriate by the Corporation or the In21 surance Corporation to cover the cost of such review.

22 (d) STATE ELIGIBILITY.—

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

24 period beginning on the date of the enactment of

25 this Act, no financial assistance may be provided by
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1 the Corporation or the Insurance Corporation for

2 the development of any infrastructure facility pro3 posed for assistance by a State, or a revolving fund

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

5 (A) an evaluation process which is certified

6 by the Secretary, in accordance with regulations

7 which the Secretary shall prescribe before the

8 end of the 6-month period beginning on such

9 date of enactment, as being designed to ascer10 tain the extent to which major work with re11 spect to infrastructure facilities within the

12 State can be financed by relying on any revenue

13 reasonably obtainable from such facilities and

14 other dedicated revenue sources; and

15 (B) a program which is certified by the

16 Secretary, in accordance with regulations which

17 the Secretary shall prescribe before the end of

18 such 6-month period, as being reasonably de19 signed to promote the objective set forth in Ex20 ecutive Order No. 12893 of January 26, 1994,

21 of affording the opportunity for innovative pub22 lic-private initiatives with respect to major

23 work, consistent with the public interest.

24 (2) ACTIVITIES WITH NONSTATE ENTITIES.—

25 After the end of the 3-year period beginning on the
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1 date of the enactment of this Act, the Corporation

2 and the Insurance Corporation each may continue to

3 undertake activities with respect to projects within a

4 State relating to the development of infrastructure

5 facilities which have been submitted by entities other

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

7 including municipalities, regional authorities, and

8 private-public partnerships, if the infrastructure fa9 cilities meet the criteria for assistance established

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

11 in which such facility or facilities are to be located

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

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

14 paragraph (1), the term ‘‘major work’’ means the

15 construction of a new infrastructure facility, or the

16 reconstruction, rehabilitation, replacement, or expan17 sion of an existing infrastructure facility, involving

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

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

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

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

22 the Insurance Corporation shall each seek to provide as23 sistance to projects involving the development of infra24 structure facilities which—
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1 (1) the Corporation or the Insurance Corpora2 tion, as the case may be, determines are ready to

3 move forward promptly; and

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

5 (f) DEVELOPMENT RISK INSURANCE.—

6 (1) IN GENERAL.—Any project on the list es7 tablished pursuant to subsection (c)(2) shall be eligi8 ble to apply to the Corporation for development risk

9 insurance in accordance with this subsection to in10 sure against the risk of loss that would result if a

11 project does not proceed within a specified time

12 frame as the result of the failure to secure relevant

13 permits or specified Federal, State, or local approv14 als.

15 (2) TERMS AND SCOPE OF COVERAGE.—Devel16 opment risk insurance provided under this sub17 section shall—

18 (A) contain such limitations, deductibles,

19 exclusions, and exceptions as the Corporation

20 shall establish; and

21 (B) apply only to developmental costs in22 curred after the date of the approval of the ap23 plication for such insurance.

24 (3) MAXIMUM ON INSURANCE OF

25 PRECONSTRUCTION RISK.—The Corporation shall
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1 not insure more than 50 percent of the

2 preconstruction phase development risk of any

3 project, as determined by the Corporation.

4 (4) ADDITIONAL CONDITIONS.—The Corpora5 tion may impose such other conditions and require6 ments in connection with any insurance provided

7 under this subsection as the Corporation may deter8 mine to be appropriate, including requirements for

9 audits of costs and other matters.

10 (5) FEES FOR INSURANCE.—The Corporation

11 may charge such fees and obtain such other com12 pensation for providing insurance coverage under

13 this subsection as the Corporation, in the Corpora14 tion’s discretion, shall determine to be appropriate.

15 (6) MAXIMUM EXPOSURE OF CORPORATION.—

16 The total outstanding exposure of the Corporation

17 with respect to insurance provided under this sub18 section may not exceed the amount which is equal to

19 5 percent of the sum of the capital, surplus, and re20 tained earnings of the Corporation, as measured at

21 the time any such insurance is provided.

22 (g) DISCRETION OF CORPORATION AND INSURANCE

23 CORPORATION.—Consistent with other provisions of this

24 Act, any determination of the Corporation or the Insur25 ance Corporation to provide assistance to any project, and
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1 the manner in which such assistance is provided, including

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

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

4 Insurance Corporation, as the case may be.

5 (h) INDEPENDENT INVESTMENT COMMITTEE.—Any

6 final decision to provide or not provide assistance under

7 this Act by the Corporation or the Insurance Corporation

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

9 investment committee, of the respective corporation, which

10 shall be comprised of senior officers of the Corporation

11 and the Insurance Corporation, as the case may be, ap12 pointed to such committee by the respective board of direc13 tors, which committees shall not have any nonofficer direc14 tor members.

15 (i) STATE AND LOCAL PERMITS REQUIRED.—The

16 provision of assistance by the Corporation or the Insur17 ance Corporation in accordance with this section shall not

18 be deemed to relieve any recipient of assistance or the re19 lated project of any obligation to obtain required State and

20 local permits and approvals.

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

22 other entity receiving assistance from the Corporation or

23 the Insurance Corporation shall make annual reports to

24 the Corporation or the Insurance Corporation, as the case

25 may be, on the use of any such assistance, compliance with
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1 the criteria set forth in this section, and a disclosure of

2 all entities with a development, ownership, or operational

3 interest in a project assisted or proposed to be assisted

4 pursuant to this Act.

5 SEC. 9. CAPITALIZATION AND ORGANIZATION OF THE COR6 PORATION AND THE INSURANCE CORPORA7 TION.

8 (a) CAPITALIZATION.—

9 (1) CAPITALIZATION OF THE CORPORATION.—

10 (A) VOTING COMMON STOCK.—Effective

11 for any fiscal year only to such extent and in

12 such amounts as are provided in advance in ap13 propriation Acts, the Secretary shall subscribe

14 for and purchase, in each of the 3 years follow15 ing the date of enactment of this Act, voting

16 common stock of the Corporation having an ag17 gregate purchase price in each year of

18 $1,000,000,000, except that no such purchase

19 shall occur after the transition date.

20 (B) LIMITATION ON SALE OF SECURITIES

21 BY SECRETARY.—Securities purchased by the

22 Secretary may not be sold or otherwise trans23 ferred by the Secretary unless such sale or

24 transfer is effected pursuant to section 13 or is

25 explicitly authorized by an Act of Congress.
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1 (2) CAPITALIZATION OF THE INSURANCE COR2 PORATION.—

3 (A) IN GENERAL.—The Corporation may

4 subscribe for and purchase voting common

5 stock of the Insurance Corporation in such

6 amounts and at such times as the board of di7 rectors of the Corporation shall from time to

8 time consider appropriate.

9 (B) LIMITATION ON INVESTMENT BY COR10 PORATION.—Not more than 25 percent of the

11 capital, surplus, and retained earnings of the

12 Corporation may be invested by the Corporation

13 in the Insurance Corporation without the con14 sent of the Secretary, measured at the time of

15 any such investment.

16 (3) REPURCHASE OF OUTSTANDING OBLIGA17 TIONS.—The Corporation and the Insurance Cor18 poration may purchase in the open market any of

19 their respective outstanding obligations at any time

20 and at any price.

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

22 (1) CORPORATION.—

23 (A) PRINCIPAL OFFICE.—The Corporation

24 shall maintain its principal office in the District

25 of Columbia, and shall be deemed, for purposes
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1 of venue in civil actions, to be a resident of the

2 District of Columbia.

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

5 extent not inconsistent with this Act, the Cor6 poration shall be subject to the District of Co7 lumbia Business Corporation Act.

8 (2) INSURANCE CORPORATION.—

9 (A) PLACE OF BUSINESS.—The Insurance

10 Corporation shall maintain its principal office

11 in the District of Columbia, and shall be

12 deemed, for purposes of venue in civil actions,

13 to be a resident thereof.

14 (B) APPLICABILITY OF DISTRICT OF CO15 LUMBIA BUSINESS CORPORATION ACT.—To the

16 extent not inconsistent with this Act, the Insur17 ance Corporation shall be subject to the District

18 of Columbia Business Corporation Act.

19 (3) APPLICABILITY OF STATE INSURANCE

20 LAWS.—Before the transition date, the Corporation

21 and the Insurance Corporation shall not be subject

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

23 subdivision of any State regulating the ownership or

24 conduct of an insurance or surety business in any

25 jurisdiction.
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1 (4) EXEMPTION FROM TAXATION.—

2 (A) ON AND BEFORE TRANSITION DATE.—

3 On and before the transition date, the Corpora4 tion, the Insurance Corporation, and any other

5 subsidiary of the Corporation, including the

6 franchise, capital, reserves, surplus, securities

7 holdings, and income of the Corporation, the

8 Insurance Corporation, or any such subsidiary

9 shall be exempt from taxation now or hereafter

10 imposed by the United States, any State, or

11 any county, municipality, or local taxing au12 thority.

13 (B) AFTER TRANSITION DATE.—After the

14 transition date, the Corporation, the Insurance

15 Corporation, and any other subsidiary of the

16 Corporation, including the franchise, capital, re17 serves, surplus, securities holdings, and income

18 of the Corporation, the Insurance Corporation,

19 or any such subsidiary shall be exempt from all

20 taxation now or hereafter imposed by the

21 United States, any State, or any county, mu22 nicipality, or local taxing authority in any

23 State, provided that the Corporation, the Insur24 ance Corporation and any other subsidiary of
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1 the Corporation shall be subject to Federal in2 come taxation.

3 SEC. 10. MANAGEMENT OF THE CORPORATION.

4 (a) BOARD OF DIRECTORS.—

5 (1) NUMBER AND APPOINTMENT.—Subject to

6 the provisions of section 13, the Corporation shall

7 have a board of directors consisting of 12 members,

8 9 of whom shall be appointed by the President.

9 (2) REQUIRED EXPERTISE.—The President

10 shall appoint individuals to the board of directors of

11 the Corporation with a demonstrated experience and

12 expertise in the general field of infrastructure

13 project development, finance, or related disciplines.

14 (3) ADDITIONAL SELECTION CRITERIA.—The

15 President shall ensure that, of the nonofficer direc16 tors appointed to the board of directors, a minimum

17 of 6 shall be selected from among representatives of

18 the private sector, of which—

19 (A) 2 shall be representatives of organized

20 labor; and

21 (B) 2 shall be individuals involved in the

22 field of public-private infrastructure finance and

23 related disciplines.

24 (4) CONSULTATION WITH THE NATIONAL GOV25 ERNORS’ CONFERENCE.—The President shall select
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1 2 of the nonofficer directors to be appointed to the

2 board of directors after consulting with and consid3 ering the recommendations of the National Gov4 ernors’ Conference.

5 (5) APPOINTMENT OF OFFICERS TO THE

6 BOARD.—A majority of the nonofficer members of

7 the board shall appoint the president of the Corpora8 tion who shall serve on the board of directors. The

9 president of the Corporation shall select 2 executive

10 officers to be appointed to the board, subject to con11 firmation by a majority of the board.

12 (6) TERMS.—

13 (A) PRESIDENTIAL APPOINTEES.—Each

14 director appointed by the President shall be ap15 pointed for a term of 4 years, except as pro16 vided in subparagraph (B).

17 (B) INITIAL PRESIDENTIAL AP18 POINTEES.—As designated by the President, of

19 the directors first appointed by the President—

(i) 1 20 ⁄3 shall be appointed for a term of

21 2 years;

(ii) 1 22 ⁄3 shall be appointed for a term

23 of 3 years; and

(iii) 1 24 ⁄3 shall be appointed for a term

25 of 4 years.
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1 (C) OFFICER DIRECTORS.—Officer direc2 tors of the Corporation shall serve for a period

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

4 the Corporation.

5 (D) INTERIM APPOINTMENTS.—Any direc6 tor appointed to fill a vacancy occurring before

7 the expiration of the term for which the direc8 tor’s predecessor was appointed shall be ap9 pointed only for the remainder of that term.

10 (E) CONTINUATION OF SERVICE.—A direc11 tor may serve after the expiration of that direc12 tor’s term until a successor has taken office.

13 (7) VACANCIES.—A vacancy in the board of di14 rectors shall be filled in the manner in which the

15 original appointment was made.

16 (8) REAPPOINTMENT.—

17 (A) PRESIDENTIAL APPOINTEES.—Mem18 bers of the board of directors appointed by the

19 President may be reappointed by the President,

20 consistent with the requirements of this section.

21 (B) OFFICER DIRECTORS.—The president

22 of the Corporation shall be reappointed to the

23 board by the nonofficer directors for so long as

24 such individual continues to serve as president

25 of the Corporation. Officer directors of the
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1 board selected by the president of the Corpora2 tion may be reappointed by the president of the

3 Corporation, consistent with the requirements

4 of this section.

5 (9) REMOVAL.—

6 (A) PRESIDENTIAL APPOINTEES.—A direc7 tor appointed by the President shall be subject

8 to removal only for cause.

9 (B) OFFICER DIRECTORS.—Officer direc10 tors of the Corporation shall be subject to re11 moval from the board in the discretion of a ma12 jority of the board, except that the president of

13 the Corporation shall continue to serve on the

14 board for so long as he or she serves as presi15 dent of the Corporation.

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

17 quorum.

18 (11) CHAIRPERSON.—The chairperson of the

19 board of directors shall be selected by a majority of

20 the board from among the nonofficer directors of the

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

22 a new chairperson is selected.

23 (12) STATUS AND COMPENSATION OF BOARD

24 MEMBERS.—
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1 (A) NONOFFICER DIRECTORS.—Members

2 of the board of directors who are not officers of

3 the Corporation shall serve on a part-time basis

4 and shall receive a per diem, when engaged in

5 the actual performance of Corporation business,

6 plus reasonable reimbursement for travel, sub7 sistence and other necessary expenses incurred

8 in the performance of their duties.

9 (B) OFFICER DIRECTORS.—Members of

10 the board of directors who are officers of the

11 Corporation shall not be entitled to receive any

12 salary or other compensation for services as a

13 director of the Corporation, but may receive

14 reasonable reimbursement for travel, subsist15 ence and other necessary expenses incurred in

16 the performance of their duties as directors of

17 the Corporation.

18 (13) CONFLICTS OF INTEREST.—

19 (A) IN GENERAL.—Nonofficer directors

20 shall have no responsibility for, and shall not

21 seek to influence, any decision of the independ22 ent investment committee established pursuant

23 to section 8(h).

24 (B) CONSULTATION.—Notwithstanding

25 subparagraph (A), the investment committee
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1 may, in the committee’s discretion and on the

2 committee’s own initiative, consult with the

3 board of directors as the committee sees fit.

4 (C) LIMITATION ON CONSULTATION.—No

5 nonofficer director of the Corporation who has,

6 or is affiliated with a person who has, an inter7 est in any project under consideration for as8 sistance under this Act shall participate in any

9 consultation under subparagraph (B) with re10 spect to such project.

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

12 meet at any time pursuant to the call of the chair13 person or a majority of the directors and as provided

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

15 once each calendar quarter.

16 (15) DUTIES.—In addition to any duties estab17 lished under this Act and the bylaws of the Corpora18 tion, the board of directors shall determine the gen19 eral policies which shall govern the operations of the

20 Corporation in accordance with this Act.

21 (16) DELEGATION OF AUTHORITY.—The board

22 of directors may delegate duties and powers of the

23 board to such committees of the board as the board

24 may determine to be appropriate.

25 (b) OFFICERS OF THE CORPORATION.—
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1 (1) PRESIDENT OF THE CORPORATION.—The

2 president of the Corporation shall be the chief execu3 tive officer of the Corporation, with such executive

4 functions, powers, and duties as may be prescribed

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

6 (2) APPOINTMENT OF OFFICERS.—The presi7 dent of the Corporation shall, with the approval of

8 a majority of the board, appoint qualified individuals

9 to such executive officer positions as may be pro10 vided for in the bylaws of the Corporation, and shall

11 define their duties. The president may appoint, re12 move, fix the compensation of, and define the duties

13 of other officers as provided in the bylaws.

14 (3) COMPENSATION.—The compensation of the

15 president and the executive officers of the Corpora16 tion shall be determined by the board of directors of

17 the Corporation, in the discretion of the board of di18 rectors.

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

20 Corporation shall not participate in any review or

21 decision affecting a project under consideration for

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

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

24 project.
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1 (5) REMOVAL.—Any executive officer of the

2 Corporation may be removed in the discretion of a

3 majority of the board of directors.

4 SEC. 11. MANAGEMENT OF THE INSURANCE CORPORATION.

5 (a) BOARD OF DIRECTORS.—

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

7 provisions of section 13, the Insurance Corporation

8 shall have a board of directors consisting of 12

9 members elected by the stockholders of the Insur10 ance Corporation.

11 (2) INITIAL APPOINTMENT OF DIRECTORS.—

12 The initial directors of the Insurance Corporation

13 shall be appointed by the board of directors of the

14 Corporation.

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

16 comprised of individuals who have a demonstrated

17 expertise and experience in the field of credit en18 hancement or insurance and related disciplines, a

19 minimum of 9 of whom shall be selected from among

20 representatives of the private sector.

21 (4) TERMS.—

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

23 elected or appointed for a term of 2 years, ex24 cept as provided in subparagraph (B).
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1 (B) INTERIM APPOINTMENTS.—Any direc2 tor elected or appointed to fill a vacancy occur3 ring before the expiration of the term for which

4 the director’s predecessor was appointed shall

5 be elected or appointed only for the remainder

6 of that term.

7 (C) CONTINUATION OF SERVICE.—A direc8 tor may serve after the expiration of that direc9 tor’s term until a successor has taken office.

10 (5) VACANCIES.—A vacancy in the board of di11 rectors shall be filled in the manner in which the

12 original appointment was made, except that the by13 laws may provide for the appointment by the board

14 of directors of a director to fill a vacancy occurring

15 before the expiration of the term for which the direc16 tor’s predecessor was elected or appointed.

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

18 quorum.

19 (7) CHAIRPERSON.—

20 (A) ELECTION.—The chairperson of the

21 board of directors shall be elected by the board

22 of directors from among the directors on the

23 board.
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1 (B) TERM.—The term of office of the

2 chairperson shall be 1 year or until a new chair3 person is elected.

4 (8) STATUS AND COMPENSATION OF BOARD

5 MEMBERS.—Members of the board of directors shall

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

7 diem, when engaged in the actual performance of In8 surance Corporation business, plus reasonable reim9 bursement for travel, subsistence and other nec10 essary expenses incurred in the performance of their

11 duties.

12 (9) CONFLICTS OF INTEREST.—

13 (A) IN GENERAL.—Nonofficer directors

14 shall have no responsibility for, and shall not

15 seek to influence, any decision of the independ16 ent investment committee established pursuant

17 to section 8(h).

18 (B) CONSULTATION.—Notwithstanding

19 subparagraph (A), the investment committee

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

21 committee’s own initiative, consult with the

22 board of directors as the committee sees fit.

23 (C) LIMITATION ON CONSULTATION.—No

24 director who has, or is affiliated with any per25 son who has, an interest in any project under
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1 consideration for assistance under this Act shall

2 participate in any such consultation with re3 spect to such project.

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

5 meet at any time pursuant to the call of the chair6 person or a majority of the directors and as provided

7 by the bylaws of the Insurance Corporation, but not

8 less than once each calendar quarter.

9 (11) DUTIES.—In addition to any duties estab10 lished under this Act or the bylaws of the Insurance

11 Corporation, the board of directors shall determine

12 the general policies which shall govern the oper13 ations of the Insurance Corporation in accordance

14 with this Act.

15 (12) DELEGATION OF AUTHORITY.—The board

16 of directors may delegate duties and powers of the

17 board to such committees of the board as the board

18 may determine to be appropriate.

19 (b) OFFICERS OF THE INSURANCE CORPORATION.—

20 (1) PRESIDENT OF THE INSURANCE CORPORA21 TION.—There shall be a position of president of the

22 Insurance Corporation who shall be the chief execu23 tive officer of the Insurance Corporation, with such

24 executive functions, powers, and duties as may be
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1 prescribed by the bylaws or by the board of direc2 tors.

3 (2) APPOINTMENT OF OFFICERS.—The chair4 person of the board of directors of the Insurance

5 Corporation shall, with the approval of a majority of

6 the board, appoint a qualified individual to the posi7 tion of president of the Insurance Corporation. The

8 president of the Insurance Corporation shall, with

9 the approval of a majority of the board, appoint

10 qualified individuals to such executive officer posi11 tions as may be provided for in the bylaws of the In12 surance Corporation, and shall define their duties.

13 The president may appoint, remove, fix the com14 pensation of, and define the duties of other officers

15 as provided in the bylaws.

16 (3) COMPENSATION.—The compensation of the

17 president and the executive officers of the Insurance

18 Corporation shall be determined by the board of di19 rectors of the Insurance Corporation, in the discre20 tion of the board of directors.

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

22 Insurance Corporation shall not participate in any

23 review or decision affecting a project under consider24 ation for assistance under this Act if such officer
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1 has, or is affiliated with a person who has, an inter2 est in such project.

3 (5) REMOVAL.—Any executive officer of the In4 surance Corporation may be removed in the discre5 tion of a majority of the board of directors.

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

7 (a) GENERAL.—All meetings of the full board of di8 rectors held to conduct the business of the Corporation

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

10 and shall be preceded by reasonable notice.

11 (b) CLOSED MEETINGS.—Pursuant to such rules as

12 the Corporation and the Insurance Corporation may es13 tablish through their bylaws, the respective board of direc14 tors may close a meeting of the board if at the meeting

15 there is likely to be disclosed information which could ad16 versely affect or lead to speculation relating to an infra17 structure project under consideration for assistance under

18 this Act, or in financial or securities or commodities mar19 kets or institutions, utilities, or real estate. The deter20 mination to close any meeting of either board of directors

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

22 public, and preceded by reasonable notice. The respective

23 board of directors shall prepare minutes of any meeting
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1 which is closed to the public and make such minutes avail2 able as soon as the considerations necessitating closing

3 such meeting no longer apply.

4 SEC. 13. TRANSITION TO GOVERNMENT-SPONSORED EN5 TERPRISE.

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

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

8 transition of NIC to a government-sponsored enterprise

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

10 and Impoundment Control Act of 1974) and for the sale

11 or transfer to investors other than the Federal Govern12 ment, as set forth in subsection (b), of the voting securi13 ties of the Corporation. The Corporation shall revise such

14 transition plan as needed.

15 (b) PLAN; PENSION PLAN PARTICIPATION.—

16 (1) IN GENERAL.—The strategic plan shall in17 clude consideration of alternative means for effecting

18 such transition through a broad distribution to long19 term investors, including by a public offering of

20 stock or convertible stock or debt.

21 (2) PENSION PLAN PARTICIPATION.—The stra22 tegic plan shall include provisions that specify that

23 the initial purchasers of voting securities of the Cor24 poration or of nonvoting securities which are con25 vertible to such voting securities on the transition
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1 date (disregarding any underwriters of such securi2 ties) shall be pension plans.

3 (c) MEANS OF TRANSFER.—

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

5 for a phased transfer of ownership or for complete

6 transfer at a single point in time.

7 (2) RULES APPLICABLE IN THE CASE OF A

8 PHASED TRANSITION.—If the plan calls for phased

9 transfer of ownership—

10 (A) such transition shall be deemed to

11 occur when 100 percent of the voting securities

12 of the Corporation have been transferred to or

13 are held by investors other than the Federal

14 Government, and the investment of the Federal

15 Government in the Corporation has been repaid

16 or converted as provided in subsection (h);

17 (B) before the transition date, all equity

18 securities of the Corporation held by investors

19 other than the Federal Government (or any eq20 uity security into which any other security is

21 convertible) shall be nonvoting securities; and

22 (C) on and after the transition date, non23 voting equity securities of the Corporation held

24 by investors other than the Federal Government

25 (or into which other securities are convertible)
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1 may, in accordance with the terms of such secu2 rities, be converted or become convertible into

3 voting securities.

4 (d) REQUIREMENT OF PRESIDENTIAL APPROVAL.—

5 The Corporation may not implement the transition plan

6 without the approval of the President, and shall seek re7 approval if the plan is materially altered.

8 (e) NOTIFICATION OF CONGRESS.—

9 (1) IN GENERAL.—The Corporation shall notify

10 the Congress of—

11 (A) the Corporation’s intent to implement

12 the transition plan; and

13 (B) any material alteration of a transition

14 plan previously submitted to the Congress.

15 (2) REPORT.—Within 30 days of any notifica16 tion of the Congress under paragraph (1), the

17 Comptroller General of the United States shall sub18 mit a report to Congress evaluating the extent to

19 which—

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

21 would result in ongoing obligations (other than

22 contemplated by subsection (h)) or undue cost

23 to the Federal Government; and
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1 (B) the cash proceeds (or projected range

2 thereof) to be provided to the Federal Govern3 ment, or the securities proposed to be received

4 in exchange for the investment of the Federal

5 Government in the Corporation or portion

6 thereof, represents the full recoupment of such

7 investment (after taking into account any divi8 dends paid to the Federal Government).

9 (f) CONGRESSIONAL REVIEW.—The Corporation may

10 implement the plan not less than 60 days after notification

11 of the Congress, if the approval of the President referred

12 to in subsection (d) has been received.

13 (g) DEPOSIT OF PROCEEDS.—Any cash proceeds re14 ceivable by the Federal Government pursuant to this sec15 tion shall be deposited in the general fund of the Treasury.

16 (h) CONVERSION OF FEDERAL GOVERNMENT IN17 VESTMENT.—Upon the implementation of the transition

18 plan, the voting equity securities of the Corporation held

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

20 transition, that portion of the voting equity securities

21 which are subject to such phase shall be repurchased by

22 the Corporation or converted to long-term subordinated

23 debt securities having a par amount not less than the

24 amounts appropriated pursuant to section 18 and subject
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1 to such phase, or a combination thereof, as contemplated

2 by such plan.

3 (i) BOARD OF DIRECTORS.—

4 (1) CORPORATION.—

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

6 the 120-day period beginning on the transition

7 date, a special meeting of the stockholders of

8 the Corporation shall be held, at which all di9 rectors of the Corporation shall be elected to

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

11 successor has been elected.

12 (B) NOMINATION; SELECTION CRITERIA.—

13 The candidates for election to the board of di14 rectors under paragraph (1) shall be nominated

15 by the existing board of directors and 4 of such

16 candidates shall be nominated in accordance

17 with the selection criteria set out in section

18 10(a)(3).

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

20 election of a board of directors pursuant to sub21 paragraph (A), the directors shall be elected

22 and subject to removal by the stockholders of

23 the Corporation, as provided in the District of

24 Columbia Business Corporation Act, except that

25 the nomination of candidates for each election
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1 of the board of directors shall continue to re2 flect the requirements of section 10(a)(3).

3 (2) INSURANCE CORPORATION.—

4 (A) INITIAL BOARD.—Promptly following

5 the special meeting of the stockholders of the

6 Corporation pursuant to paragraph (1), a spe7 cial meeting of the stockholders of the Insur8 ance Corporation shall be held, at which all di9 rectors or the Insurance Corporation shall be

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

11 director’s successor has been elected.

12 (B) SUBSEQUENT BOARDS.—After the 1st

13 election of a board of directors pursuant to sub14 paragraph (A), the directors shall be elected

15 and subject to removal by the stockholders of

16 the Insurance Corporation, as provided in the

17 District of Columbia Business Corporation Act.

18 (j) TRANSMITTAL OF FINAL PLAN AFTER COMPLE19 TION.—The Corporation shall transmit copies of the final

20 strategic plan for transition to the President and the Con21 gress upon completion of such transition.
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1 SEC. 14. STATUS AND APPLICABILITY OF CERTAIN FED2 ERAL LAWS.

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

4 transition date, the Corporation, the Insurance Corpora5 tion, and any other subsidiary of the Corporation, shall—

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

7 (2) comply with all Federal laws regulating the

8 budgetary and auditing practices of a government

9 corporation, except as otherwise provided in this Act.

10 (b) SUBSEQUENT TO THE TRANSITION DATE.—On

11 and after the transition date, the Corporation, the Insur12 ance Corporation, and any other subsidiary of the Cor13 poration shall not be considered to be an agency, instru14 mentality, or establishment of the United States Govern15 ment or a government corporation or a government-con16 trolled corporation, for purposes of any Federal law, ex17 cept as otherwise provided in this Act.

18 (c) AUTHORIZED INVESTMENTS AND SECURITY.—All

19 obligations issued by the Corporation shall be authorized

20 investments for any person created under the laws of the

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

22 person may hold or invest in obligations issued by or guar23 anteed as to principal or interest by the United States or

24 any agency or instrumentality of the United States.

25 (d) EFFECT OF AND EXEMPTIONS FROM OTHER

26 LAWS.—
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1 (1) EXEMPT SECURITIES.—All equity and debt

2 securities and other obligations issued by the Cor3 poration or the Insurance Corporation pursuant to

4 this Act shall be deemed to be exempt securities

5 within the meaning of laws administered by the Se6 curities and Exchange Commission to the same ex7 tent as securities which are direct obligations of, or

8 obligations fully guaranteed as to principal or inter9 est by, the United States.

10 (2) OPEN MARKET OPERATIONS AND STATE

11 TAX EXEMPT STATUS.—The obligations of the Cor12 poration shall be deemed to be obligations of the

13 United States for the purposes of the provision des14 ignated as (b)(2) of the 2nd undesignated paragraph

15 of section 14 of the Federal Reserve Act and section

16 3124 of title 31, United States Code.

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

18 priority established in favor of the United States by

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

20 not apply with respect to any indebtedness of the

21 Corporation or the Insurance Corporation.

22 (e) FEDERAL RESERVE BANKS AS DEPOSITARIES,

23 CUSTODIANS, AND FISCAL AGENTS.—The Federal reserve

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

25 agents of, the Corporation and the Insurance Corporation.
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1 (f) ACCESS TO BOOK-ENTRY SYSTEM.—The Sec2 retary may authorize the Corporation and the Insurance

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

4 reserve system.

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

6 NIC shall take such action as may be necessary to

7 ensure that projects assisted in whole or in part under

8 the provisions of this Act shall incorporate a provision re9 quiring in any contract relating to any construction, recon10 struction, rehabilitation, replacement, or expansion of

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

12 the locality, as predetermined by the Secretary of Labor

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

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

15 paid to all laborers and mechanics employed to perform

16 such contracts.

17 SEC. 16. OBLIGATIONS NOT FEDERALLY GUARANTEED;

18 STATE LAWS.

19 (a) STATUS OF SECURITIES.—

20 (1) NO FULL FAITH AND CREDIT OF THE

21 U.S.—Obligations of the Corporation or the Insur22 ance Corporation, and obligations insured by any

23 such corporation shall not be obligations of, or guar24 anteed as to principal or interest by, the United
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1 States or any agency of the United States and the

2 obligations shall so plainly state.

3 (2) FINANCING NOT TREATED AS U.S. GUARAN4 TEE.—The provision of assistance of any kind or na5 ture from NIC shall not be treated as a direct or in6 direct guarantee of any payment of principal or in7 terest on any security by the United States for pur8 poses of section 149(b) of the Internal Revenue

9 Code of 1986 or any other law.

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

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

12 financial assistance provided by any governmental entity

13 in connection with such assistance under this Act shall be

14 valid and lawful notwithstanding any State or local restric15 tions regarding extensions of credit or other benefits to

16 private persons or entities, or other similar restrictions.

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

18 CONGRESS.

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

20 shall be maintained in accordance with generally accepted

21 accounting principles and shall be subject to an annual

22 audit by independent public accountants of nationally rec23 ognized standing.

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

25 and the Congress, within 90 days after the end of each
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1 fiscal year, a complete and detailed report with respect

2 to the preceding fiscal year, setting forth—

3 (1) a summary of NIC’s operations, for such

4 preceding fiscal year;

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

6 with respect thereto prepared by the independent

7 public accountant reviewing such statements and a

8 copy of any report made on an audit conducted

9 under subsection (a) of this section;

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

11 securities outstanding at the end of such fiscal year,

12 with a statement of the amounts issued and re13 deemed or paid during such fiscal year; and

14 (4) the status of projects receiving funding or

15 other assistance pursuant to this Act, including dis16 closure of all entities with a development, ownership,

17 or operational interest in such projects.

18 (c) BOOKS AND RECORDS.—

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

20 books and records to support the financial trans21 actions of the Corporation, the Insurance Corpora22 tion, and subsidiaries of such corporations.

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

24 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. AUTHORIZATIONS.

6 (a) APPROPRIATIONS AUTHORIZED FOR ESTABLISH7 MENT.—There are hereby authorized to be appropriated

8 to the Secretary $30,000,000 for the purpose of facilitat9 ing the NIC’s initial operations.

10 (b) APPROPRIATIONS AUTHORIZED FOR CONDUCT OF

11 BUSINESS OF NIC.—There are authorized to be appro12 priated to the Secretary $1,000,000,000 for each of the

13 fiscal years 1998 through 2000 to make the capital con14 tributions in accordance with section 9(a)(1)(A) for the

15 purpose of carrying out this Act.

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

17 transition date, the funds appropriated under subsection

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

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

20 ‘‘National Infrastructure Development Corporation Ac21 count’’, which shall be available to the Corporation, with22 out need for further appropriation and without fiscal year

23 limitation, for carrying out its purposes, functions and

24 powers, including the investment and reinvestment of

25 these funds as permitted in this Act, and which shall not
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1 be subject to apportionment under subchapter II of chap2 ter 15 of title 31. The Secretary of the Treasury, in con3 sultation with the board of directors of the Corporation,

4 shall invest amounts in the account in public debt securi5 ties with maturities suitable to the needs of the account

6 and bearing interest at rates determined by the Secretary,

7 taking into consideration current market yields on out8 standing marketable obligations of the United States of

9 comparable maturities.

10 SEC. 19. PROHIBITION ON ADDITIONAL FEDERAL ASSIST11 ANCE.

12 Except as otherwise specifically provided by sections

13 13 and 18, NIC shall receive no appropriations, loans, or

14 other financial assistance from the Federal Government.

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