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‘‘BORROWING AUTHORITY
‘‘SEC. 206. (a) The Corporation may issue notes, de-
bentures, bonds, and other evidences of indebtedness in
such amounts and on such terms and conditions as its
Board of Directors may determine subject to the limita-
tions prescribed in this title.
‘‘(b) Except as provided in section 209(b) of this title,
the aggregate outstanding indebtedness of the Corporation
under this section at any time may not exceed ten times
the reserve fund of the Corporation under section 207(a)
of this title at that time.
‘‘(c) The obligations of the Corporation issued under
this section shall be guaranteed with the full faith and
credit of the United States.
‘‘(d) Any of the obligations issued by the Corporation
may be secured by its pledging or granting of security in-
terests in all or any part of its revenues or other receipts
or all or any part of its assets.
‘‘(e) Neither the Directors nor any other person exe-
cuting obligations shall be subject to any personal liability
or accountability by reason of the issuance thereof.
‘‘(f) All obligations of the Corporation shall be nego-
tiable instruments, subject only to any provisions for reg-
istration of ownership of obligations.
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‘‘CAPITALIZATION AND RESERVE FUND
‘‘SEC. 207. (a) The capitalization of the Corporation
shall consist of amounts appropriated pursuant to sub-
section (b) of this section and amounts contributed by par-
ticipating States in accordance with subsection (c) of this
section. The amount of the capitalization shall constitute
a reserve fund which shall not be available for making
loans under this title. The Corporation may invest any
portion of the reserve fund which is not, in its judgment,
required to meet current needs. Such investments may be
made only in interest-bearing obligations of the United
States with maturities suitable for the needs of the Cor-
poration. The interest on and the proceeds from the sale
or redemption of any such obligation shall be credited to
and form a part of the reserve fund.
‘‘(b) There is authorized to be appropriated for the
capitalization of the Corporation for fiscal years beginning
after September 30, 1993, not to exceed $2,500,000,000.
‘‘(c) A State electing to participate in the Corporation
may make contributions to the Corporation at such times
and in such amounts as the State chooses. Except as pro-
vided in section 209(d) of this title, the total contributions
of a State to the Corporation shall not exceed an amount
equal to the amount which bears the same ratio to
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$2,500,000,000 as the population of such State bears to
the population of all the States.
‘‘LOANS TO STATES AND LOCAL GOVERNMENTS
‘‘SEC. 208. (a) The Corporation is authorized to
make loans to participating States and to units of local
government located in participating States for projects for
the construction, rehabilitation, and repair of public facili-
ties in accordance with this section. Any such loan may
be in an amount sufficient to pay for all or a portion of
the cost of completing an approved project, except that
the amount of any such loan may not be used for payment
of the non-Federal share of the cost of any project for
which a Federal grant is made.
‘‘(b)(1) Except as otherwise provided in section
209(c) of this title, the total amount of the loans outstand-
ing under subsection (a) of this section shall at no time
exceed the aggregate outstanding indebtedness of the Cor-
poration under section 206(b) of this title.
‘‘(2)(A) Except as otherwise provided in subpara-
graph (B) of this paragraph and section 209(c) of this
title, the total amount of the loans to a State and to units
of local government within such State outstanding under
subsection (a) of this section shall at no time exceed that
amount which bears the same ratio to the total amount
allowable under paragraph (1) of this subsection as the
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amount of contributions made by such State to the Cor-
poration under section 207(c) of this title bears to the
amount of contributions made by all participating States
to the Corporation under section 207(c) of this title.
‘‘(B) In no event shall the total amount allowable
under subparagraph (A) for loans to a State and to units
of local government in such State exceed the amount
which would be allowable for loans to such State and such
units under subparagraph (A) if (i) the full amount au-
thorized by section 207(b) were appropriated, (ii) each
State made the maximum contribution allowable to such
State under section 207(c), and (iii) the Corporation in-
curred the maximum allowable indebtedness under section
206(b).
‘‘(c) The Corporation may not make a loan for a
project for a public facility unless the Corporation deter-
mines that the public facility after completion of the
project will generate fees for the use of the facility in
amounts sufficient to repay the principal and interest on
the loan and to create a sufficient reserve for operation
and maintenance of the project and for replacement costs
over the useful life of the project. An applicant for a loan
under this section shall demonstrate to the satisfaction of
the Corporation that such applicant (or the agency or in-
strumentality for whom such applicant is applying under
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subsection (h)(1) or (h)(2)) has the legal authority to as-
sess and collect such fees with respect to the project and
that such fees will provide sufficient revenues to meet the
requirements of the preceding sentence.
‘‘(d) As a condition of any loan made under this title
for a project for a public facility, the Corporation shall
require that fees for the use of the facility be collected
over the term of the loan in amounts sufficient to meet
the requirements of subsection (c) and that all such fees
be deposited in separate accounts (1) for the payment of
principal and interest on such loan, and (2) for the pay-
ment of operation, maintenance, and replacement costs.
‘‘(e) The Corporation may disapprove a loan applica-
tion under this section for a project if it determines that
the project is not feasible from an engineering standpoint,
that the project will not generate revenues sufficient to
satisfy the requirements of subsection (c) of this section,
or that it is otherwise inconsistent with this title.
‘‘(f) Each loan made under this title shall bear inter-
est at a rate determined by the Corporation to be nec-
essary to provide a return to the Corporation sufficient
to pay for the Corporation’s cost of borrowing funds and
for the Corporation’s administrative costs (including the
costs of salaries of directors, officers, and employees).
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‘‘(g) The term of repayment for any loan made under
this section shall not exceed the useful life of the project
(as determined by the Corporation), except that in no
event shall such term exceed 25 years.
‘‘(h)(1) The Governor of a State shall submit applica-
tions for loans for projects involving public facilities of
such State or any agency or instrumentality of such State.
In the case of any agency or instrumentality of two or
more States, the Governors of such States shall jointly
submit applications for loans for projects involving public
facilities of such agency or instrumentality.
‘‘(2) The responsible official of a unit of local govern-
ment shall submit applications for loans for projects in-
volving public facilities of such unit of local government
or any agency or instrumentality of such unit. In the case
of an agency or instrumentality of two or more units of
local government, the responsible officials of such units
shall jointly submit applications for loans for projects in-
volving public facilities of such agency or instrumentality.
‘‘(3) The Corporation shall not approve an applica-
tion for a loan submitted by one or more units of local
government within a State unless the Governor of such
State has certified approval of the application.
‘‘(4) The Governor of a State shall not submit appli-
cations for loans for such State and approve applications
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for loans for units of local government in such State in
aggregate amounts which exceed the amount allowable for
loans in such State under subsection (b)(2). Any applica-
tion for a loan for a project for an agency or instrumental-
ity of two or more States shall contain an agreement
among such States as to the apportionment of costs
among such States for purposes of this paragraph and
subsection (b)(2).
‘‘(5) The Governor of a State shall ensure a proper
distribution of the funds allowable for loans in such State
under subsection (b)(2) between urban and rural areas by
selecting projects for submission under paragraph (1) and
projects for approval under paragraph (2) so that the per-
centage of funds borrowed for projects in units of local
government having a population of 50,000 or more is not
more than 5 percent greater nor less than 5 percent lower
than the percentage of the State’s population residing in
units of local government having a population of 50,000
or more. After the end of the two-year period beginning
on the date the first loan is made under this title to a
State or a unit of local government in such State, the Cor-
poration shall only make a loan to such State or such a
unit if, after taking into account that loan and all previous
loans made to such State and such units, the Governor
will be in compliance with the preceding sentence or will
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be more closely in compliance with the preceding sentence
than before such loan was made.
‘‘(i) As a condition of any loan under this title, the
Corporation shall require that all contracts made with the
proceeds of such loan be awarded on the basis of competi-
tive bidding.
‘‘(j) The Corporation shall conduct such audits as
may be necessary to enforce this title. If the Corporation
determines that fees are not being collected in sufficient
amounts to meet the requirements of subsection (c) of this
section, the Corporation shall notify the loan recipient of
the amount by which such fees need to be increased. The
Corporation shall not make additional loans to such recipi-
ent until the fees are so increased.
‘‘(k) There is authorized to be appropriated to the
Corporation for fiscal years beginning after September 30,
1993, such additional sums as may be necessary to reduce
interest rates paid by borrowers under this title. Any
amount appropriated under this subsection for a fiscal
year shall be applied uniformly, as determined by the Cor-
poration, to reduce interest rates for all recipients of loans
under this title during such fiscal year.
‘‘DEFAULTS
‘‘SEC. 209. (a)(1) If the Corporation determines that
any loan is in default, the Corporation shall notify the re-
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cipient (and the State in which a unit of local government
is located if such unit is the recipient) of such default.
‘‘(2) During the period beginning on the date of such
notification and ending on the earlier of the date such de-
fault is cured or the date which is two years after the date
of such notification, the Corporation shall not make loans
to such recipient and, in any case in which the recipient
is a State, the Corporation shall not make loans to any
unit of local government within that State.
‘‘(3) If the recipient (or the State on behalf of a recip-
ient which is a unit of local government) does not cure
any default within two years after the date of notification
under paragraph (1), the Corporation shall reduce the re-
serve fund established under section 207(a) by the amount
of the loan which remains in default. Such amount shall
be set aside for purposes of repaying the holders of the
obligations issued under section 206 of this title.
‘‘(b) A reduction in the reserve fund under subsection
(a)(3) of this section shall not affect any outstanding obli-
gation for purposes of applying the limitation on indebted-
ness under section 206(b) of this title. The Corporation
shall not issue any obligation under section 206 of this
title after such a reduction if the outstanding indebtedness
of the Corporation after the issuance of such obligation
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exceeds an amount equal to ten times the reserve fund,
as so reduced.
‘‘(c) A reduction in the reserve fund under subsection
(a)(3) of this section shall not affect any outstanding loan
for purposes of applying the limitations on amounts allow-
able for loans under paragraphs (1) and (2) of section
208(b) of this title. Any reduction in the amount available
for loans which results from such a reduction in the re-
serve fund shall first be applied to reduce the amount
available for future loans to the State which is found to
be in default and to units of local government within such
State. To the extent necessary, after the amount available
to such State and such units is reduced to zero, such a
reduction in the reserve fund shall be applied to reduce
the amount available for future loans to the other States
and units of local government within such States in pro-
portion to the contributions of each such State to the
Corporation.
‘‘(d) At any time after a reduction is made in the
reserve fund under subsection (a)(3) of this section on ac-
count of a default by a State or a unit of local government
in such State, such State may contribute all or a portion
of the amount of such reduction to the reserve fund. Any
additional amount of authority to make loans under sec-
tion 208(b)(1) resulting from such contribution shall first
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be made available to States other than the State making
such contribution and to units of local government in such
States to the extent that the amount available to such
other States and units was reduced under subsection (c)
of this section, and any excess authority to make loans
resulting from such contribution shall be made available
to the State making such contribution and to units of local
government in such State.
‘‘TAXABLE STATUS
‘‘SEC. 210. The Corporation, its property, its fran-
chise, capital, reserves, surplus, security holdings, and
other funds, and its income shall be exempt from all tax-
ation now or hereafter imposed by the United States or
by any State or local taxing authority; except that (1) any
real property and any tangible personal property of the
Corporation shall be subject to Federal, State, and local
taxation to the same extent according to its value as other
such property is taxed, and (2) any and all obligations
issued by the Corporation shall be subject both as to prin-
cipal and interest to Federal, State, and local taxation to
the same extent as the obligations of private corporations
are taxed.
‘‘AUDIT BY GENERAL ACCOUNTING OFFICE
‘‘SEC. 211. The General Accounting Office shall audit
the financial transactions of the Corporation, and for this
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purpose shall have access to all its books, records, and
accounts.
‘‘ANNUAL REPORT
‘‘SEC. 212. The Corporation shall submit an annual
report to the Congress and the President as soon as prac-
ticable after the end of each fiscal year on the status of
the Corporation and its reserve fund. Each such report
shall include a description of the projects for which loans
were made during the preceding fiscal year.
‘‘DEFINITIONS
‘‘SEC. 213. For purposes of this title—
‘‘(1) the term ‘construction’ means the actual
building of a new public facility at a site where no
similar facility previously existed, including the ac-
quisition of land for such facility and nonstructural
alternatives, and the reconstruction of a public facil-
ity at an existing site or adjacent to an existing site;
‘‘(2) the term ‘maintenance’ means routine and
regularly scheduled activities intended to keep a
public facility operating at its designed specifica-
tions;
‘‘(3) the term ‘public facility’ means any facility
owned or operated by a State, a unit of local govern-
ment, or an agency or instrumentality of one or
more States or units of local government, including,
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but not limited to, a highway, street, bridge, mass
transit facility and equipment, airport, water supply
and distribution system, sewer, lock and dam, build-
ing, port, waterway, and dock; except that such term
does not include any Federal-aid highways (as de-
fined in title 23, United States Code);
‘‘(4) the term ‘rehabilitation’ means the correc-
tion of structural flaws in a public facility so as to
extend the design life of such facility;
‘‘(5) the term ‘repair’ means the correction of
a structural flaw in a public facility without adding
significantly to the design life of such facility;
‘‘(6) the term ‘State’ means the several States,
the District of Columbia, Puerto Rico, the Virgin Is-
lands, Guam, American Samoa, and the Common-
wealth of the Northern Marianas; and
‘‘(7) the term ‘unit of local government’ means
a city, county, town, township, parish, village, or
other general purpose political subdivision of a
State, and an Indian tribe.’’.
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