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(2) REPAYMENT.—Section 184(c) of such title 
is amended—
(A) in paragraph (2)—
(i) by striking ‘scheduled’; 
(ii) by inserting ‘be scheduled to’ after 
‘shall’; and 
(iii) by striking ‘be fully repaid, with 
interest,’ and inserting ‘conclude, with full 
repayment of principal and interest,’; and 
(B) by striking paragraph (3). 
(f) PROGRAM ADMINISTRATION.—Section 185 of 
such title is amended to read as follows: 
‘§ 185. Program Administration 
‘(a) REQUIREMENT.—The Secretary shall establish a 
uniform system to service the Federal credit instrument 
made available under this chapter. 
‘(b) FEES.—The Secretary may establish fees at a 
level to cover all or a portion of the costs to the Federal 
Government of servicing the Federal credit instrument. 
‘(c) SERVICES.—The Secretary may identify a finan-
cial entity to assist the Secretary in servicing a Federal 
credit instrument. The services—
‘(1) shall act as the agent for the Secretary; 
and
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‘(2) shall receive a servicing fee, subject to ap-
proval by the Secretary. 
‘(d) ASSISTANCE FROM EXPERT FIRMS.—The Sec-
retary may retain the services of one or more expert firms, 
including counsel, in the field of municipal and project fi-
nance to assist in the underwriting and servicing of Fed-
eral credit instruments.’. 
(g) FUNDING.—Section 188 of such title is amended 
to read as follows: 
‘§ 188. Funding 
‘(a) FUNDING.—
‘(1) IN GENERAL.—There are authorized to be 
appropriated from the Highway Trust Fund (other 
than the Mass Transit Account) $130,000,000 for 
fiscal year 2004 and $140,000,000 for each of fiscal 
years 2005 through 2009 to carry out this chapter. 
‘(2) ADMINISTRATIVE
COSTS.—From funds 
made available under paragraph (1), the Secretary 
may use, for the administration of this subchapter, 
not more than $3,000,000 for each of fiscal years 
2004 through 2009. 
‘(3) AVAILABILITY.—Amounts made available 
under paragraph (1) shall remain available until ex-
pended. 
‘(b) CONTRACT AUTHORITY.—
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‘(1) IN GENERAL.—Notwithstanding any other 
provision of law, approval by the Secretary of a Fed-
eral credit instrument that uses funds made avail-
able under this chapter shall be deemed to be ac-
ceptance by the United States of a contractual obli-
gation to fund the Federal credit instrument. 
‘(2) AVAILABILITY.—Amounts authorized under 
this section for a fiscal year shall be available for ob-
ligation on October 1 of the fiscal year. 
‘(c) LIMITATIONS ON CREDIT AMOUNTS.—For each 
of fiscal years 2004 through 2009, principal amounts of 
Federal credit instruments made available under this 
chapter shall be limited to $2,600,000,000.’. 
SEC. 1602. STATE INFRASTRUCTURE BANKS. 
(a) IN GENERAL.—Section 189 of title 23, United 
States Code, is amended to read as follows: 
‘§ 189. State infrastructure bank program 
‘(a) DEFINITIONS.—In this section, the following 
definitions apply: 
‘(1) CAPITAL
PROJECT.—The term ‘‘capital 
project’’ has the meaning such term has under sec-
tion 5302 of title 49, United States Code. 
‘(2) OTHER FORMS OF CREDIT ASSISTANCE.—
The term ‘‘other forms of credit assistance’’ includes 
any use of funds in an infrastructure bank—
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‘(A) to provide credit enhancements; 
‘(B) to serve as a capital reserve for bond 
or debt instrument financing; 
‘(C) to subsidize interest rates; 
‘(D) to insure or guarantee letters of credit 
and credit instruments against credit risk of 
loss; 
‘(E) to finance purchase and lease agree-
ments with respect to transit projects; 
‘(F) to provide bond or debt financing in-
strument security; and 
‘(G) to provide other forms of debt financ-
ing and methods of leveraging funds that are 
approved by the Secretary and that relate to 
the project with respect to which such assist-
ance is being provided. 
‘(3) STATE.—The term ‘‘State’’ has the mean-
ing such term has under section 401 of this title. 
‘(4) CAPITALIZATION.—The term ‘‘capitaliza-
tion’’ means the process used for depositing funds as 
initial capital into a State infrastructure bank to es-
tablish the infrastructure bank. 
‘(5) COOPERATIVE
AGREEMENT.—The term 
‘‘cooperative agreement’’ means written consent be-
tween a State and the Secretary which sets forth the
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manner in which the infrastructure bank established 
by the State in accordance with this section will be 
administered. 
‘(6) LOAN.—The term ‘‘loan’’ means any form 
of direct financial assistance from a State infra-
structure bank that is required to be repaid over a 
period of time and that is provided to a project 
sponsor for all or part of the costs of the project. 
‘(7) 
GUARANTEE.—The 
term 
‘‘guarantee’’ 
means a contract entered into by a State infrastruc-
ture bank in which the bank agrees to take responsi-
bility for all or a portion of a project sponsor’s fi-
nancial obligations for a project under specified con-
ditions. 
‘(8) INITIAL
ASSISTANCE.—The term ‘‘initial 
assistance’’ means the first round of funds that are 
loaned or used for credit enhancement by a State in-
frastructure bank for projects eligible for assistance 
under this section. 
‘(9) LEVERAGE.—The term ‘‘leverage’’ means a 
financial structure used to increase funds in a State 
infrastructure bank through the issuance of debt in-
struments. 
‘(10) LEVERAGED.—The term ‘‘leveraged’’, as 
used with respect to a State infrastructure bank,
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means that the bank has total potential liabilities 
that exceed the capital of the bank. 
‘(b) COOPERATIVE AGREEMENTS.—Subject to the 
provisions of this section, the Secretary may enter into co-
operative agreements with States for the establishment of 
State infrastructure banks for making loans and providing 
other forms of credit assistance to public and private enti-
ties carrying out or proposing to carry out projects eligible 
for assistance under this section. 
‘(d) FUNDING.—
‘(1) HIGHWAY
ACCOUNT.—Subject to sub-
section (j), the Secretary may permit a State enter-
ing into a cooperative agreement under this section 
to establish a State infrastructure bank to deposit 
into the highway account of the bank not to ex-
ceed—
‘(A) 10 percent of the funds apportioned to 
the State for each of fiscal years 2005 through 
2009 
under 
each 
of 
sections 
104(b)(1), 
104(b)(3), 104(b)(4), and 144; and 
‘(B) 10 percent of the funds allocated to 
the State for each of such fiscal years under 
section 105. 
‘(2) TRANSIT ACCOUNT.—Subject to subsection 
(j), the Secretary may permit a State entering into
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a cooperative agreement under this section to estab-
lish a State infrastructure bank, and any other re-
cipient of Federal assistance under section 5307, 
5309, or 5311 of title 49, to deposit into the transit 
account of the bank not to exceed 10 percent of the 
funds made available to the State or other recipient 
in each of fiscal years 2005 through 2009 for capital 
projects under each of such sections. 
‘(3) RAIL ACCOUNT.—Subject to subsection (j), 
the Secretary may permit a State entering into a co-
operative agreement under this section to establish 
a State infrastructure bank, and any other recipient 
of Federal assistance under subtitle V of title 49, to 
deposit into the rail account of the bank funds made 
available to the State or other recipient in each of 
fiscal years 2005 through 2009 for capital projects 
under such subtitle. 
‘(4) CAPITAL GRANTS.—
‘(A) HIGHWAY ACCOUNT.—Federal funds 
deposited into a highway account of a State in-
frastructure bank under paragraph (1) shall 
constitute for purposes of this section a capital-
ization grant for the highway account of the 
bank.
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‘(B) TRANSIT
ACCOUNT.—Federal funds 
deposited into a transit account of a State in-
frastructure bank under paragraph (2) shall 
constitute for purposes of this section a capital-
ization grant for the transit account of the 
bank. 
‘(C) RAIL
ACCOUNT.—Federal funds de-
posited into a rail account of a State infrastruc-
ture bank under paragraph 3 shall constitute 
for purposes of this section a capitalization 
grant for the rail account of the bank. 
‘(5) SPECIAL RULE FOR URBANIZED AREAS OF 
OVER 200,000.—Funds in a State infrastructure bank 
that are attributed to urbanized areas of a State 
with urbanized populations of over 200,000 under 
section 133(d)(3) may be used to provide assistance 
with respect to a project only if the metropolitan 
planning organization designated for such area con-
curs, in writing, with the provision of such assist-
ance. 
‘(6) DISCONTINUANCE
OF
FUNDING.—If the 
Secretary determines that a State is not imple-
menting the State’s infrastructure bank in accord-
ance with a cooperative agreement entered into 
under subsection (b), the Secretary may prohibit the
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State from contributing additional Federal funds to 
the bank. 
‘(e) FORMS OF ASSISTANCE FROM INFRASTRUCTURE 
BANKS.—An infrastructure bank established under this 
section may make loans or provide other forms of credit 
assistance to a public or private entity in an amount equal 
to all or a part of the cost of carrying out a project eligible 
for assistance under this section. The amount of any loan 
or other form of credit assistance provided for the project 
may be subordinated to any other debt financing for the 
project. Initial assistance provided with respect to a 
project from Federal funds deposited into an infrastruc-
ture bank under this section may not be made in the form 
of a grant. 
‘(f) ELIGIBLE PROJECTS.—Subject to subsection (e), 
funds in an infrastructure bank established under this sec-
tion may be used only to provide assistance for projects 
eligible for assistance under this title and capital projects 
defined in section 5302 of title 49, and any other projects 
related to surface transportation that the Secretary deter-
mines to be appropriate. 
‘(g) INFRASTRUCTURE BANK REQUIREMENTS.—In 
order to establish an infrastructure bank under this sec-
tion, the State establishing the bank shall—
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‘(1) deposit in cash, at a minimum, into each 
account of the bank from non-Federal sources an 
amount equal to 25 percent of the amount of each 
capitalization grant made to the State and deposited 
into such account; except that, if the deposit is into 
the highway account of the bank and the State has 
a non-Federal share under section 120(b) that is 
less than 25 percent, the percentage to be deposited 
from non-Federal sources shall be the lower percent-
age of such grant; 
‘(2) ensure that the bank maintains on a con-
tinuing basis an investment grade rating on its debt, 
or has a sufficient level of bond or debt financing in-
strument insurance, to maintain the viability of the 
bank; 
‘(3) ensure that investment income derived 
from funds deposited to an account of the bank 
are—
‘(A) credited to the account; 
‘(B) available for use in providing loans 
and other forms of credit assistance to projects 
eligible for assistance from the account; and 
‘(C) invested in United States Treasury se-
curities, bank deposits, or such other financing 
instruments as the Secretary may approve to
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earn interest to enhance the leveraging of 
projects assisted by the bank; 
‘(4) ensure that any loan from the bank will 
bear interest at or below market interest rates, as 
determined by the State, to make the project that is 
the subject of the loan feasible; 
‘(5) ensure that repayment of any loan from the 
bank will commence not later than 5 years after the 
project has been completed or, in the case of a high-
way project, the facility has opened to traffic, which-
ever is later; 
‘(6) ensure that the term for repaying any loan 
will not exceed 30 years after the date of the first 
payment on the loan; and 
‘(7) require the bank to make an annual report 
to the Secretary on its status no later than Sep-
tember 30 of each year and such other reports as 
the Secretary may require under guidelines issued to 
carry out this section. 
‘(i) UNITED STATES NOT OBLIGATED.—The deposit 
of Federal funds into an infrastructure bank established 
under this section shall not be construed as a commitment, 
guarantee, or obligation on the part of the United States 
to any third party, nor shall any third party have any right 
against the United States for payment solely by virtue of
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the contribution. Any security or debt-financing instru-
ment issued by the infrastructure bank shall expressly 
state that the security or instrument does not constitute 
a commitment, guarantee, or obligation of the United 
States. 
‘(j) MANAGEMENT OF FEDERAL FUNDS.—Sections 
3335 and 6503 of title 31, shall not apply to funds depos-
ited into an infrastructure bank under this section. 
‘(k) PROGRAM ADMINISTRATION.—For each of fiscal 
years 2005 through 2009, a State may expend not to ex-
ceed 2 percent of the Federal funds contributed to an in-
frastructure bank established by the State under this sec-
tion to pay the reasonable costs of administering the 
bank.’. 
(b) PREPARATORY AMENDMENTS.—
(1) SECTION 181.—Section 181 of such title is 
further amended—
(A) by striking the section designator and 
heading and inserting the following: 
‘§ 181. Generally applicable provisions’; 
(B) by striking ‘In this subchapter’ and in-
serting ‘(a) Definitions.—In this chapter’; 
(C) in paragraph (5) by striking ‘184’ and 
inserting ‘604’;